Correlation Between Americafirst Large and Great-west Core
Can any of the company-specific risk be diversified away by investing in both Americafirst Large and Great-west Core 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 Great-west Core 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 Great West E Strategies, you can compare the effects of market volatilities on Americafirst Large and Great-west Core 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 Great-west Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Large and Great-west Core.
Diversification Opportunities for Americafirst Large and Great-west Core
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Americafirst and Great-west is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Large Cap and Great West E Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great-west Core 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 Great-west Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great-west Core has no effect on the direction of Americafirst Large i.e., Americafirst Large and Great-west Core go up and down completely randomly.
Pair Corralation between Americafirst Large and Great-west Core
Assuming the 90 days horizon Americafirst Large Cap is expected to generate 0.86 times more return on investment than Great-west Core. However, Americafirst Large Cap is 1.16 times less risky than Great-west Core. It trades about 0.06 of its potential returns per unit of risk. Great West E Strategies is currently generating about -0.13 per unit of risk. If you would invest 1,456 in Americafirst Large Cap on October 25, 2024 and sell it today you would earn a total of 24.00 from holding Americafirst Large Cap or generate 1.65% 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. Great West E Strategies
Performance |
| Timeline |
| Americafirst Large Cap |
| Great-west Core |
Americafirst Large and Great-west Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americafirst Large and Great-west Core
The main advantage of trading using opposite Americafirst Large and Great-west Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Large position performs unexpectedly, Great-west Core 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 Great-west Core will offset losses from the drop in Great-west Core's long position.| Americafirst Large vs. Calvert Developed Market | Americafirst Large vs. Western Asset Diversified | Americafirst Large vs. Alphacentric Hedged Market | Americafirst Large vs. Artisan Developing World |
| Great-west Core vs. Icon Information Technology | Great-west Core vs. Towpath Technology | Great-west Core vs. Firsthand Technology Opportunities | Great-west Core vs. Vanguard Information Technology |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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