Correlation Between Ab All and Americafirst Income

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

By analyzing existing cross correlation between Ab All Market and Americafirst Income Fund, you can compare the effects of market volatilities on Ab All and Americafirst Income 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 Ab All with a short position of Americafirst Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab All and Americafirst Income.

Diversification Opportunities for Ab All and Americafirst Income

0.76

Correlation Coefficient

Ab All  Americafirst Income

Poor diversification

The 3 months correlation between AMTOX and Americafirst is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ab All Market and Americafirst Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Income and Ab All 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 Ab All Market are associated (or correlated) with Americafirst Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Income has no effect on the direction of Ab All i.e., Ab All and Americafirst Income go up and down completely randomly.

Pair Corralation between Ab All and Americafirst Income

Assuming the 90 days horizon Ab All Market is expected to under-perform the Americafirst Income. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ab All Market is 1.11 times less risky than Americafirst Income. The mutual fund trades about -0.31 of its potential returns per unit of risk. The Americafirst Income Fund is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest  466.00  in Americafirst Income Fund on October 7, 2024 and sell it today you would lose (17.00) from holding Americafirst Income Fund or give up 3.65% of portfolio value over 90 days.

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

Ab All Market  vs.  Americafirst Income Fund

Ab All Market

Risk-Adjusted Performance

0 of 100

Very Weak

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

Americafirst Income

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ab All and Americafirst Income

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

The idea behind Ab All Market and Americafirst Income Fund 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.