Correlation Between Americafirst Monthly and Ladenburg Growth

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

Diversification Opportunities for Americafirst Monthly and Ladenburg Growth

0.52

Correlation Coefficient

Americafirst Monthly  Ladenburg Growth

Very weak diversification

The 3 months correlation between Americafirst and Ladenburg is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Monthly Risk On and Ladenburg Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Growth 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 Ladenburg Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Growth has no effect on the direction of Americafirst Monthly i.e., Americafirst Monthly and Ladenburg Growth go up and down completely randomly.

Pair Corralation between Americafirst Monthly and Ladenburg Growth

Assuming the 90 days horizon Americafirst Monthly Risk On is expected to generate 0.9 times more return on investment than Ladenburg Growth. However, Americafirst Monthly Risk On is 1.12 times less risky than Ladenburg Growth. It trades about -0.05 of its potential returns per unit of risk. Ladenburg Growth is currently generating about -0.14 per unit of risk. If you would invest  1,492  in Americafirst Monthly Risk On on December 25, 2024 and sell it today you would lose (69.00) from holding Americafirst Monthly Risk On or give up 4.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Americafirst Monthly Risk On  vs.  Ladenburg Growth

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.

Ladenburg Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ladenburg Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Americafirst Monthly and Ladenburg Growth

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

The idea behind Americafirst Monthly Risk On and Ladenburg Growth 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.