Correlation Between Americafirst Large and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both Americafirst Large and Nasdaq 100 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 Nasdaq 100 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 Nasdaq 100 Index Fund, you can compare the effects of market volatilities on Americafirst Large and Nasdaq 100 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 Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Large and Nasdaq 100.
Diversification Opportunities for Americafirst Large and Nasdaq 100
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Americafirst and Nasdaq is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Large Cap and Nasdaq 100 Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 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 Nasdaq 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Index has no effect on the direction of Americafirst Large i.e., Americafirst Large and Nasdaq 100 go up and down completely randomly.
Pair Corralation between Americafirst Large and Nasdaq 100
Assuming the 90 days horizon Americafirst Large is expected to generate 1.95 times less return on investment than Nasdaq 100. But when comparing it to its historical volatility, Americafirst Large Cap is 1.19 times less risky than Nasdaq 100. It trades about 0.06 of its potential returns per unit of risk. Nasdaq 100 Index Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,176 in Nasdaq 100 Index Fund on October 25, 2024 and sell it today you would earn a total of 2,202 from holding Nasdaq 100 Index Fund or generate 69.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Americafirst Large Cap vs. Nasdaq 100 Index Fund
Performance |
| Timeline |
| Americafirst Large Cap |
| Nasdaq 100 Index |
Americafirst Large and Nasdaq 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americafirst Large and Nasdaq 100
The main advantage of trading using opposite Americafirst Large and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Large position performs unexpectedly, Nasdaq 100 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 Nasdaq 100 will offset losses from the drop in Nasdaq 100'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 |
| Nasdaq 100 vs. Global Gold Fund | Nasdaq 100 vs. First Eagle Gold | Nasdaq 100 vs. Oppenheimer Gold Special | Nasdaq 100 vs. Short Precious Metals |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |