Correlation Between Calvert Large and Americafirst Tactical

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

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

Diversification Opportunities for Calvert Large and Americafirst Tactical

0.12

Correlation Coefficient

Calvert Large  Americafirst Tactical

Average diversification

The 3 months correlation between Calvert and Americafirst is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Large Cap and Americafirst Tactical Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Tactical and Calvert Large 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 Calvert Large Cap are associated (or correlated) with Americafirst Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Tactical has no effect on the direction of Calvert Large i.e., Calvert Large and Americafirst Tactical go up and down completely randomly.

Pair Corralation between Calvert Large and Americafirst Tactical

Assuming the 90 days horizon Calvert Large Cap is expected to under-perform the Americafirst Tactical. But the mutual fund apears to be less risky and, when comparing its historical volatility, Calvert Large Cap is 11.58 times less risky than Americafirst Tactical. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Americafirst Tactical Alpha is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,431  in Americafirst Tactical Alpha on October 6, 2024 and sell it today you would earn a total of  219.00  from holding Americafirst Tactical Alpha or generate 15.3% return on investment over 90 days.

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

Calvert Large Cap  vs.  Americafirst Tactical Alpha

Calvert Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Americafirst Tactical

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Americafirst Tactical Alpha are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Americafirst Tactical showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calvert Large and Americafirst Tactical

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

The idea behind Calvert Large Cap and Americafirst Tactical Alpha 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.