Correlation Between Oil Gas and Americafirst Defensive
Can any of the company-specific risk be diversified away by investing in both Oil Gas and Americafirst Defensive 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 Oil Gas and Americafirst Defensive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Gas Ultrasector and Americafirst Defensive Growth, you can compare the effects of market volatilities on Oil Gas and Americafirst Defensive 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 Oil Gas with a short position of Americafirst Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Gas and Americafirst Defensive.
Diversification Opportunities for Oil Gas and Americafirst Defensive
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oil and Americafirst is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector and Americafirst Defensive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Defensive and Oil Gas 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 Oil Gas Ultrasector are associated (or correlated) with Americafirst Defensive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Defensive has no effect on the direction of Oil Gas i.e., Oil Gas and Americafirst Defensive go up and down completely randomly.
Pair Corralation between Oil Gas and Americafirst Defensive
Assuming the 90 days horizon Oil Gas Ultrasector is expected to generate 7.33 times more return on investment than Americafirst Defensive. However, Oil Gas is 7.33 times more volatile than Americafirst Defensive Growth. It trades about 0.34 of its potential returns per unit of risk. Americafirst Defensive Growth is currently generating about 0.29 per unit of risk. If you would invest 3,568 in Oil Gas Ultrasector on September 2, 2024 and sell it today you would earn a total of 440.00 from holding Oil Gas Ultrasector or generate 12.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil Gas Ultrasector vs. Americafirst Defensive Growth
Performance |
| Timeline |
| Oil Gas Ultrasector |
| Americafirst Defensive |
Oil Gas and Americafirst Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Gas and Americafirst Defensive
The main advantage of trading using opposite Oil Gas and Americafirst Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Gas position performs unexpectedly, Americafirst Defensive 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 Defensive will offset losses from the drop in Americafirst Defensive's long position.| Oil Gas vs. Precious Metals Ultrasector | Oil Gas vs. Real Estate Ultrasector | Oil Gas vs. Basic Materials Ultrasector | Oil Gas vs. Utilities Ultrasector Profund |
| Americafirst Defensive vs. Scharf Fund Retail | Americafirst Defensive vs. Sarofim Equity | Americafirst Defensive vs. Icon Equity Income | Americafirst Defensive vs. The Gabelli Equity |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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