Correlation Between Americafirst Large and Champlain Mid
Can any of the company-specific risk be diversified away by investing in both Americafirst Large and Champlain Mid 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 Americafirst Large and Champlain Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Americafirst Large Cap and Champlain Mid Cap, you can compare the effects of market volatilities on Americafirst Large and Champlain Mid 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 Americafirst Large with a short position of Champlain Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Large and Champlain Mid.
Diversification Opportunities for Americafirst Large and Champlain Mid
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Americafirst and Champlain is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Large Cap and Champlain Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champlain Mid Cap and Americafirst 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 Americafirst Large Cap are associated (or correlated) with Champlain Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champlain Mid Cap has no effect on the direction of Americafirst Large i.e., Americafirst Large and Champlain Mid go up and down completely randomly.
Pair Corralation between Americafirst Large and Champlain Mid
Assuming the 90 days horizon Americafirst Large Cap is expected to generate 0.93 times more return on investment than Champlain Mid. However, Americafirst Large Cap is 1.07 times less risky than Champlain Mid. It trades about 0.05 of its potential returns per unit of risk. Champlain Mid Cap is currently generating about 0.02 per unit of risk. If you would invest 1,107 in Americafirst Large Cap on November 5, 2024 and sell it today you would earn a total of 287.00 from holding Americafirst Large Cap or generate 25.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Americafirst Large Cap vs. Champlain Mid Cap
Performance |
| Timeline |
| Americafirst Large Cap |
| Champlain Mid Cap |
Americafirst Large and Champlain Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americafirst Large and Champlain Mid
The main advantage of trading using opposite Americafirst Large and Champlain Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Large position performs unexpectedly, Champlain Mid 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 Champlain Mid will offset losses from the drop in Champlain Mid's long position.| Americafirst Large vs. Franklin Emerging Market | Americafirst Large vs. Artisan Developing World | Americafirst Large vs. Doubleline Emerging Markets | Americafirst Large vs. Vy Jpmorgan Emerging |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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