Correlation Between Americafirst Large and Extended Market
Can any of the company-specific risk be diversified away by investing in both Americafirst Large and Extended Market 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 Extended Market 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 Extended Market Index, you can compare the effects of market volatilities on Americafirst Large and Extended Market 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 Extended Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Large and Extended Market.
Diversification Opportunities for Americafirst Large and Extended Market
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Americafirst and Extended is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Large Cap and Extended Market Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extended Market Index 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 Extended Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extended Market Index has no effect on the direction of Americafirst Large i.e., Americafirst Large and Extended Market go up and down completely randomly.
Pair Corralation between Americafirst Large and Extended Market
Assuming the 90 days horizon Americafirst Large Cap is expected to generate 1.76 times more return on investment than Extended Market. However, Americafirst Large is 1.76 times more volatile than Extended Market Index. It trades about 0.13 of its potential returns per unit of risk. Extended Market Index is currently generating about 0.19 per unit of risk. If you would invest 1,338 in Americafirst Large Cap on November 3, 2024 and sell it today you would earn a total of 56.00 from holding Americafirst Large Cap or generate 4.19% 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. Extended Market Index
Performance |
| Timeline |
| Americafirst Large Cap |
| Extended Market Index |
Americafirst Large and Extended Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americafirst Large and Extended Market
The main advantage of trading using opposite Americafirst Large and Extended Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Large position performs unexpectedly, Extended Market 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 Extended Market will offset losses from the drop in Extended Market's long position.| Americafirst Large vs. Fwnhtx | Americafirst Large vs. Wmcanx | Americafirst Large vs. Arrow Managed Futures | Americafirst Large vs. Small Pany Growth |
| Extended Market vs. Lebenthal Lisanti Small | Extended Market vs. Oklahoma College Savings | Extended Market vs. Small Pany Growth | Extended Market vs. Sp Smallcap 600 |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |