Correlation Between Americafirst Large and Stock Index
Can any of the company-specific risk be diversified away by investing in both Americafirst Large and Stock Index 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 Stock Index 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 Stock Index Fund, you can compare the effects of market volatilities on Americafirst Large and Stock Index 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 Stock Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Large and Stock Index.
Diversification Opportunities for Americafirst Large and Stock Index
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Americafirst and Stock is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Large Cap and Stock Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stock Index Fund 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 Stock Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stock Index Fund has no effect on the direction of Americafirst Large i.e., Americafirst Large and Stock Index go up and down completely randomly.
Pair Corralation between Americafirst Large and Stock Index
Assuming the 90 days horizon Americafirst Large Cap is expected to generate 1.29 times more return on investment than Stock Index. However, Americafirst Large is 1.29 times more volatile than Stock Index Fund. It trades about 0.3 of its potential returns per unit of risk. Stock Index Fund is currently generating about 0.18 per unit of risk. If you would invest 1,356 in Americafirst Large Cap on August 31, 2024 and sell it today you would earn a total of 102.00 from holding Americafirst Large Cap or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Americafirst Large Cap vs. Stock Index Fund
Performance |
| Timeline |
| Americafirst Large Cap |
| Stock Index Fund |
Americafirst Large and Stock Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americafirst Large and Stock Index
The main advantage of trading using opposite Americafirst Large and Stock Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Large position performs unexpectedly, Stock Index 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 Stock Index will offset losses from the drop in Stock Index's long position.| Americafirst Large vs. Aquagold International | Americafirst Large vs. Morningstar Unconstrained Allocation | Americafirst Large vs. Thrivent High Yield | Americafirst Large vs. Via Renewables |
| Stock Index vs. Tax Managed Large Cap | Stock Index vs. Fundamental Large Cap | Stock Index vs. Americafirst Large Cap | Stock Index vs. Qs Large Cap |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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