Correlation Between Americafirst Monthly and Amer Beacon

Can any of the company-specific risk be diversified away by investing in both Americafirst Monthly and Amer Beacon 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 Monthly and Amer Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Americafirst Monthly Risk On and Amer Beacon Ark, you can compare the effects of market volatilities on Americafirst Monthly and Amer Beacon 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 Monthly with a short position of Amer Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Monthly and Amer Beacon.

Diversification Opportunities for Americafirst Monthly and Amer Beacon

0.78

Correlation Coefficient

Americafirst Monthly  Amer Beacon

Poor diversification

The 3 months correlation between Americafirst and Amer is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Monthly Risk On and Amer Beacon Ark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Beacon Ark and Americafirst Monthly 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 Monthly Risk On are associated (or correlated) with Amer Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Beacon Ark has no effect on the direction of Americafirst Monthly i.e., Americafirst Monthly and Amer Beacon go up and down completely randomly.

Pair Corralation between Americafirst Monthly and Amer Beacon

Assuming the 90 days horizon Americafirst Monthly Risk On is expected to generate 0.48 times more return on investment than Amer Beacon. However, Americafirst Monthly Risk On is 2.1 times less risky than Amer Beacon. It trades about -0.03 of its potential returns per unit of risk. Amer Beacon Ark is currently generating about -0.09 per unit of risk. If you would invest  1,453  in Americafirst Monthly Risk On on December 21, 2024 and sell it today you would lose (40.00) from holding Americafirst Monthly Risk On or give up 2.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Americafirst Monthly Risk On  vs.  Amer Beacon Ark

Americafirst Monthly

Risk-Adjusted Performance

Very Weak

Over the last 90 days Americafirst Monthly Risk On has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Americafirst Monthly is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amer Beacon Ark

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amer Beacon Ark has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Americafirst Monthly and Amer Beacon

The main advantage of trading using opposite Americafirst Monthly and Amer Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Monthly position performs unexpectedly, Amer Beacon 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 Amer Beacon will offset losses from the drop in Amer Beacon's long position.

The idea behind Americafirst Monthly Risk On and Amer Beacon Ark pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.