Correlation Between Banking Fund and Americafirst Tactical

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

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

Diversification Opportunities for Banking Fund and Americafirst Tactical

0.76

Correlation Coefficient

Banking Fund  Americafirst Tactical

Poor diversification

The 3 months correlation between Banking and Americafirst is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Banking Fund Investor and Americafirst Tactical Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Tactical and Banking Fund 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 Banking Fund Investor 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 Banking Fund i.e., Banking Fund and Americafirst Tactical go up and down completely randomly.

Pair Corralation between Banking Fund and Americafirst Tactical

Assuming the 90 days horizon Banking Fund is expected to generate 13.56 times less return on investment than Americafirst Tactical. In addition to that, Banking Fund is 1.19 times more volatile than Americafirst Tactical Alpha. It trades about 0.01 of its total potential returns per unit of risk. Americafirst Tactical Alpha is currently generating about 0.16 per unit of volatility. If you would invest  1,475  in Americafirst Tactical Alpha on October 6, 2024 and sell it today you would earn a total of  175.00  from holding Americafirst Tactical Alpha or generate 11.86% return on investment over 90 days.

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

Banking Fund Investor  vs.  Americafirst Tactical Alpha

Banking Fund Investor

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Banking Fund Investor are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Banking Fund 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 Banking Fund and Americafirst Tactical

The main advantage of trading using opposite Banking Fund and Americafirst Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banking Fund 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 Banking Fund Investor 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.