Correlation Between Americafirst Monthly and Ab International
Can any of the company-specific risk be diversified away by investing in both Americafirst Monthly and Ab International 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 Monthly and Ab International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Americafirst Monthly Risk On and Ab International Growth, you can compare the effects of market volatilities on Americafirst Monthly and Ab International 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 Monthly with a short position of Ab International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Monthly and Ab International.
Diversification Opportunities for Americafirst Monthly and Ab International
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Americafirst and AWPIX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Monthly Risk On and Ab International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab International Growth and Americafirst Monthly 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 Monthly Risk On are associated (or correlated) with Ab International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab International Growth has no effect on the direction of Americafirst Monthly i.e., Americafirst Monthly and Ab International go up and down completely randomly.
Pair Corralation between Americafirst Monthly and Ab International
Assuming the 90 days horizon Americafirst Monthly is expected to generate 1.32 times less return on investment than Ab International. But when comparing it to its historical volatility, Americafirst Monthly Risk On is 1.18 times less risky than Ab International. It trades about 0.28 of its potential returns per unit of risk. Ab International Growth is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,785 in Ab International Growth on April 6, 2025 and sell it today you would earn a total of 429.00 from holding Ab International Growth or generate 24.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Americafirst Monthly Risk On vs. Ab International Growth
Performance |
| Timeline |
| Americafirst Monthly |
| Ab International Growth |
Americafirst Monthly and Ab International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americafirst Monthly and Ab International
The main advantage of trading using opposite Americafirst Monthly and Ab International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Monthly position performs unexpectedly, Ab International 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 Ab International will offset losses from the drop in Ab International's long position.The idea behind Americafirst Monthly Risk On and Ab International Growth 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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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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