Correlation Between Americafirst Large and Manning Napier

Can any of the company-specific risk be diversified away by investing in both Americafirst Large and Manning Napier 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 Manning Napier 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 Manning Napier Overseas, you can compare the effects of market volatilities on Americafirst Large and Manning Napier 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 Manning Napier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Large and Manning Napier.

Diversification Opportunities for Americafirst Large and Manning Napier

-0.66

Correlation Coefficient

Americafirst Large  Manning Napier

Excellent diversification

The 3 months correlation between Americafirst and Manning is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Large Cap and Manning Napier Overseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier Overseas 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 Manning Napier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manning Napier Overseas has no effect on the direction of Americafirst Large i.e., Americafirst Large and Manning Napier go up and down completely randomly.

Pair Corralation between Americafirst Large and Manning Napier

Assuming the 90 days horizon Americafirst Large Cap is expected to generate 1.0 times more return on investment than Manning Napier. However, Americafirst Large Cap is 1.0 times less risky than Manning Napier. It trades about 0.13 of its potential returns per unit of risk. Manning Napier Overseas is currently generating about -0.12 per unit of risk. If you would invest  1,327  in Americafirst Large Cap on September 20, 2024 and sell it today you would earn a total of  90.00  from holding Americafirst Large Cap or generate 6.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Americafirst Large Cap  vs.  Manning Napier Overseas

Americafirst Large Cap

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Americafirst Large Cap are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Americafirst Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Manning Napier Overseas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manning Napier Overseas 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.

Pair Trading with Americafirst Large and Manning Napier

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

The idea behind Americafirst Large Cap and Manning Napier Overseas 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.