Correlation Between Americafirst Monthly and Six Circles

Can any of the company-specific risk be diversified away by investing in both Americafirst Monthly and Six Circles 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 Six Circles 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 Six Circles Unconstrained, you can compare the effects of market volatilities on Americafirst Monthly and Six Circles 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 Six Circles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Monthly and Six Circles.

Diversification Opportunities for Americafirst Monthly and Six Circles

0.22

Correlation Coefficient

Americafirst Monthly  Six Circles

Modest diversification

The 3 months correlation between Americafirst and Six is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Monthly Risk On and Six Circles Unconstrained in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Circles Unconstrained 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 Six Circles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Circles Unconstrained has no effect on the direction of Americafirst Monthly i.e., Americafirst Monthly and Six Circles go up and down completely randomly.

Pair Corralation between Americafirst Monthly and Six Circles

Assuming the 90 days horizon Americafirst Monthly Risk On is expected to generate 1.33 times more return on investment than Six Circles. However, Americafirst Monthly is 1.33 times more volatile than Six Circles Unconstrained. It trades about 0.03 of its potential returns per unit of risk. Six Circles Unconstrained is currently generating about -0.26 per unit of risk. If you would invest  1,503  in Americafirst Monthly Risk On on October 10, 2024 and sell it today you would earn a total of  13.00  from holding Americafirst Monthly Risk On or generate 0.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Americafirst Monthly Risk On  vs.  Six Circles Unconstrained

Americafirst Monthly

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Americafirst Monthly Risk On are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Americafirst Monthly showed solid returns over the last few months and may actually be approaching a breakup point.

Six Circles Unconstrained

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Americafirst Monthly and Six Circles

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

The idea behind Americafirst Monthly Risk On and Six Circles Unconstrained 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.