Correlation Between Americafirst Large and Prudential Balanced
Can any of the company-specific risk be diversified away by investing in both Americafirst Large and Prudential Balanced 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 Prudential Balanced 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 Prudential Balanced, you can compare the effects of market volatilities on Americafirst Large and Prudential Balanced 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 Prudential Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Large and Prudential Balanced.
Diversification Opportunities for Americafirst Large and Prudential Balanced
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Americafirst and Prudential is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Large Cap and Prudential Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Balanced 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 Prudential Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Balanced has no effect on the direction of Americafirst Large i.e., Americafirst Large and Prudential Balanced go up and down completely randomly.
Pair Corralation between Americafirst Large and Prudential Balanced
Assuming the 90 days horizon Americafirst Large Cap is expected to generate 2.14 times more return on investment than Prudential Balanced. However, Americafirst Large is 2.14 times more volatile than Prudential Balanced. It trades about 0.34 of its potential returns per unit of risk. Prudential Balanced is currently generating about 0.2 per unit of risk. If you would invest 1,371 in Americafirst Large Cap on May 1, 2025 and sell it today you would earn a total of 66.00 from holding Americafirst Large Cap or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Americafirst Large Cap vs. Prudential Balanced
Performance |
| Timeline |
| Americafirst Large Cap |
| Prudential Balanced |
Americafirst Large and Prudential Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americafirst Large and Prudential Balanced
The main advantage of trading using opposite Americafirst Large and Prudential Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Large position performs unexpectedly, Prudential Balanced 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 Prudential Balanced will offset losses from the drop in Prudential Balanced's long position.| Americafirst Large vs. Investec Emerging Markets | Americafirst Large vs. Johcm Emerging Markets | Americafirst Large vs. Oshaughnessy Market Leaders | Americafirst Large vs. Saat Market Growth |
| Prudential Balanced vs. Prudential Balanced Fund | Prudential Balanced vs. Calvert Large Cap | Prudential Balanced vs. Federated Global Allocation | Prudential Balanced vs. Federated Global Allocation |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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