Correlation Between Americafirst Large and The Core

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Can any of the company-specific risk be diversified away by investing in both Americafirst Large and The Core 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 Large and The Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Americafirst Large Cap and The E Fixed, you can compare the effects of market volatilities on Americafirst Large and The Core 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 Large with a short position of The Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Large and The Core.

Diversification Opportunities for Americafirst Large and The Core

AmericafirstTheDiversified AwayAmericafirstTheDiversified Away100%
0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Americafirst and The is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Large Cap and The E Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Core and Americafirst 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 Americafirst Large Cap are associated (or correlated) with The Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Core has no effect on the direction of Americafirst Large i.e., Americafirst Large and The Core go up and down completely randomly.

Pair Corralation between Americafirst Large and The Core

Assuming the 90 days horizon Americafirst Large Cap is expected to under-perform the The Core. In addition to that, Americafirst Large is 4.13 times more volatile than The E Fixed. It trades about -0.05 of its total potential returns per unit of risk. The E Fixed is currently generating about 0.04 per unit of volatility. If you would invest  842.00  in The E Fixed on November 18, 2024 and sell it today you would earn a total of  6.00  from holding The E Fixed or generate 0.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Americafirst Large Cap  vs.  The E Fixed

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -6-4-202
JavaScript chart by amCharts 3.21.15SBQAX HCIIX
       Timeline  
Americafirst Large Cap 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Americafirst Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Americafirst Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb13.413.613.81414.214.414.6
The Core 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in The E Fixed are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, The Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb8.358.48.458.58.55

Americafirst Large and The Core Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.96-1.48-1.0-0.52-0.050.370.851.331.812.29 1234
JavaScript chart by amCharts 3.21.15SBQAX HCIIX
       Returns  

Pair Trading with Americafirst Large and The Core

The main advantage of trading using opposite Americafirst Large and The Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Large position performs unexpectedly, The Core 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 The Core will offset losses from the drop in The Core's long position.
The idea behind Americafirst Large Cap and The E Fixed 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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