Correlation Between Americafirst Large and Transamerica Emerging
Can any of the company-specific risk be diversified away by investing in both Americafirst Large and Transamerica Emerging 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 Transamerica Emerging 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 Transamerica Emerging Markets, you can compare the effects of market volatilities on Americafirst Large and Transamerica Emerging 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 Transamerica Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Large and Transamerica Emerging.
Diversification Opportunities for Americafirst Large and Transamerica Emerging
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Americafirst and Transamerica is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Large Cap and Transamerica Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Emerging 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 Transamerica Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Emerging has no effect on the direction of Americafirst Large i.e., Americafirst Large and Transamerica Emerging go up and down completely randomly.
Pair Corralation between Americafirst Large and Transamerica Emerging
Assuming the 90 days horizon Americafirst Large Cap is expected to generate 3.2 times more return on investment than Transamerica Emerging. However, Americafirst Large is 3.2 times more volatile than Transamerica Emerging Markets. It trades about -0.07 of its potential returns per unit of risk. Transamerica Emerging Markets is currently generating about -0.34 per unit of risk. If you would invest 1,486 in Americafirst Large Cap on October 11, 2024 and sell it today you would lose (37.00) from holding Americafirst Large Cap or give up 2.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Americafirst Large Cap vs. Transamerica Emerging Markets
Performance |
| Timeline |
| Americafirst Large Cap |
| Transamerica Emerging |
Americafirst Large and Transamerica Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americafirst Large and Transamerica Emerging
The main advantage of trading using opposite Americafirst Large and Transamerica Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Large position performs unexpectedly, Transamerica Emerging 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 Transamerica Emerging will offset losses from the drop in Transamerica Emerging's long position.| Americafirst Large vs. American Mutual Fund | Americafirst Large vs. Aqr Large Cap | Americafirst Large vs. Tax Managed Large Cap | Americafirst Large vs. Blackrock Large Cap |
| Transamerica Emerging vs. Tax Managed Large Cap | Transamerica Emerging vs. Americafirst Large Cap | Transamerica Emerging vs. Touchstone Large Cap | Transamerica Emerging vs. Profunds Large Cap Growth |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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