Correlation Between Americafirst Tactical and Americafirst Defensive

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

By analyzing existing cross correlation between Americafirst Tactical Alpha and Americafirst Defensive Growth, you can compare the effects of market volatilities on Americafirst Tactical and Americafirst Defensive 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 Tactical with a short position of Americafirst Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Tactical and Americafirst Defensive.

Diversification Opportunities for Americafirst Tactical and Americafirst Defensive

-0.36

Correlation Coefficient

Americafirst Tactical  Americafirst Defensive

Very good diversification

The 3 months correlation between Americafirst and Americafirst is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Tactical Alpha and Americafirst Defensive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Defensive and Americafirst Tactical 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 Tactical Alpha are associated (or correlated) with Americafirst Defensive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Defensive has no effect on the direction of Americafirst Tactical i.e., Americafirst Tactical and Americafirst Defensive go up and down completely randomly.

Pair Corralation between Americafirst Tactical and Americafirst Defensive

Assuming the 90 days horizon Americafirst Tactical Alpha is expected to generate 2.71 times more return on investment than Americafirst Defensive. However, Americafirst Tactical is 2.71 times more volatile than Americafirst Defensive Growth. It trades about 0.26 of its potential returns per unit of risk. Americafirst Defensive Growth is currently generating about -0.01 per unit of risk. If you would invest  1,544  in Americafirst Tactical Alpha on September 2, 2024 and sell it today you would earn a total of  307.00  from holding Americafirst Tactical Alpha or generate 19.88% return on investment over 90 days.

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

Americafirst Tactical Alpha  vs.  Americafirst Defensive Growth

Americafirst Tactical

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Americafirst Tactical Alpha are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Americafirst Tactical showed solid returns over the last few months and may actually be approaching a breakup point.

Americafirst Defensive

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Americafirst Defensive Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Americafirst Defensive 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 Tactical and Americafirst Defensive

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

The idea behind Americafirst Tactical Alpha and Americafirst Defensive 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.