Correlation Between Large Cap and Americafirst Defensive
Can any of the company-specific risk be diversified away by investing in both Large Cap 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 Large Cap and Americafirst Defensive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Large Cap Growth Profund and Americafirst Defensive Growth, you can compare the effects of market volatilities on Large Cap 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 Large Cap with a short position of Americafirst Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Large Cap and Americafirst Defensive.
Diversification Opportunities for Large Cap and Americafirst Defensive
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Large and Americafirst is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Large Cap Growth Profund and Americafirst Defensive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Defensive and Large Cap 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 Large Cap Growth Profund 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 Large Cap i.e., Large Cap and Americafirst Defensive go up and down completely randomly.
Pair Corralation between Large Cap and Americafirst Defensive
Assuming the 90 days horizon Large Cap Growth Profund is expected to generate 4.12 times more return on investment than Americafirst Defensive. However, Large Cap is 4.12 times more volatile than Americafirst Defensive Growth. It trades about 0.25 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 4,304 in Large Cap Growth Profund on September 2, 2024 and sell it today you would earn a total of 217.00 from holding Large Cap Growth Profund or generate 5.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Large Cap Growth Profund vs. Americafirst Defensive Growth
Performance |
| Timeline |
| Large Cap Growth |
| Americafirst Defensive |
Large Cap and Americafirst Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Large Cap and Americafirst Defensive
The main advantage of trading using opposite Large Cap and Americafirst Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Large Cap 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.| Large Cap vs. Short Real Estate | Large Cap vs. Ultrashort Mid Cap Profund | Large Cap vs. Technology Ultrasector Profund | Large Cap vs. Technology 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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