Correlation Between Americafirst Large and American Funds
Can any of the company-specific risk be diversified away by investing in both Americafirst Large and American Funds 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 American Funds 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 American Funds 2040, you can compare the effects of market volatilities on Americafirst Large and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Large and American Funds.
Diversification Opportunities for Americafirst Large and American Funds
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Americafirst and American is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Large Cap and American Funds 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2040 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2040 has no effect on the direction of Americafirst Large i.e., Americafirst Large and American Funds go up and down completely randomly.
Pair Corralation between Americafirst Large and American Funds
Assuming the 90 days horizon Americafirst Large Cap is expected to generate 1.91 times more return on investment than American Funds. However, Americafirst Large is 1.91 times more volatile than American Funds 2040. It trades about 0.29 of its potential returns per unit of risk. American Funds 2040 is currently generating about 0.0 per unit of risk. If you would invest 1,359 in Americafirst Large Cap on August 24, 2024 and sell it today you would earn a total of 95.00 from holding Americafirst Large Cap or generate 6.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Americafirst Large Cap vs. American Funds 2040
Performance |
| Timeline |
| Americafirst Large Cap |
| American Funds 2040 |
Americafirst Large and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americafirst Large and American Funds
The main advantage of trading using opposite Americafirst Large and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Large position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Americafirst Large vs. Aqr Equity Market | Americafirst Large vs. Rbc Emerging Markets | Americafirst Large vs. Pace International Emerging | Americafirst Large vs. Ep Emerging Markets |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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