Correlation Between Dana Large and Americafirst Large
Can any of the company-specific risk be diversified away by investing in both Dana Large and Americafirst Large at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dana Large and Americafirst Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Large Cap and Americafirst Large Cap, you can compare the effects of market volatilities on Dana Large and Americafirst Large and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dana Large with a short position of Americafirst Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Americafirst Large.
Diversification Opportunities for Dana Large and Americafirst Large
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dana and Americafirst is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Americafirst Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Large Cap and Dana Large is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dana Large Cap are associated (or correlated) with Americafirst Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Large Cap has no effect on the direction of Dana Large i.e., Dana Large and Americafirst Large go up and down completely randomly.
Pair Corralation between Dana Large and Americafirst Large
Assuming the 90 days horizon Dana Large Cap is expected to generate 0.94 times more return on investment than Americafirst Large. However, Dana Large Cap is 1.06 times less risky than Americafirst Large. It trades about 0.1 of its potential returns per unit of risk. Americafirst Large Cap is currently generating about 0.09 per unit of risk. If you would invest 2,303 in Dana Large Cap on August 27, 2024 and sell it today you would earn a total of 386.00 from holding Dana Large Cap or generate 16.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dana Large Cap vs. Americafirst Large Cap
Performance |
| Timeline |
| Dana Large Cap |
| Americafirst Large Cap |
Dana Large and Americafirst Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana Large and Americafirst Large
The main advantage of trading using opposite Dana Large and Americafirst Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large position performs unexpectedly, Americafirst Large can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Americafirst Large will offset losses from the drop in Americafirst Large's long position.| Dana Large vs. Dana Large Cap | Dana Large vs. Dana Epiphany Esg | Dana Large vs. Dana Small Cap | Dana Large vs. Goldman Sachs Tax Advantaged |
| Americafirst Large vs. Wisdomtree Siegel Moderate | Americafirst Large vs. Target Retirement 2040 | Americafirst Large vs. Hartford Moderate Allocation | Americafirst Large vs. Pgim Conservative Retirement |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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