Correlation Between Gotham Absolute and Americafirst Large
Can any of the company-specific risk be diversified away by investing in both Gotham Absolute 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 Gotham Absolute and Americafirst Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gotham Absolute Return and Americafirst Large Cap, you can compare the effects of market volatilities on Gotham Absolute 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 Gotham Absolute with a short position of Americafirst Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gotham Absolute and Americafirst Large.
Diversification Opportunities for Gotham Absolute and Americafirst Large
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gotham and Americafirst is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Gotham Absolute Return 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 Gotham Absolute 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 Gotham Absolute Return 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 Gotham Absolute i.e., Gotham Absolute and Americafirst Large go up and down completely randomly.
Pair Corralation between Gotham Absolute and Americafirst Large
Assuming the 90 days horizon Gotham Absolute Return is expected to under-perform the Americafirst Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Gotham Absolute Return is 1.44 times less risky than Americafirst Large. The mutual fund trades about -0.12 of its potential returns per unit of risk. The Americafirst Large Cap is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,444 in Americafirst Large Cap on September 14, 2024 and sell it today you would lose (4.00) from holding Americafirst Large Cap or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gotham Absolute Return vs. Americafirst Large Cap
Performance |
| Timeline |
| Gotham Absolute Return |
| Americafirst Large Cap |
Gotham Absolute and Americafirst Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gotham Absolute and Americafirst Large
The main advantage of trading using opposite Gotham Absolute and Americafirst Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gotham Absolute 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.| Gotham Absolute vs. Western Asset Municipal | Gotham Absolute vs. Abr 7525 Volatility | Gotham Absolute vs. Rbb Fund | Gotham Absolute vs. T Rowe Price |
| Americafirst Large vs. Western Asset Diversified | Americafirst Large vs. Aqr Diversified Arbitrage | Americafirst Large vs. Guggenheim Diversified Income | Americafirst Large vs. Tax Free Conservative Income |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |