Correlation Between Alternative Investment and FireFly Metals
Can any of the company-specific risk be diversified away by investing in both Alternative Investment and FireFly Metals 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 Alternative Investment and FireFly Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alternative Investment Trust and FireFly Metals, you can compare the effects of market volatilities on Alternative Investment and FireFly Metals 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 Alternative Investment with a short position of FireFly Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternative Investment and FireFly Metals.
Diversification Opportunities for Alternative Investment and FireFly Metals
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alternative and FireFly is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Alternative Investment Trust and FireFly Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FireFly Metals and Alternative Investment 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 Alternative Investment Trust are associated (or correlated) with FireFly Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FireFly Metals has no effect on the direction of Alternative Investment i.e., Alternative Investment and FireFly Metals go up and down completely randomly.
Pair Corralation between Alternative Investment and FireFly Metals
Assuming the 90 days trading horizon Alternative Investment Trust is expected to generate 0.59 times more return on investment than FireFly Metals. However, Alternative Investment Trust is 1.7 times less risky than FireFly Metals. It trades about 0.15 of its potential returns per unit of risk. FireFly Metals is currently generating about -0.02 per unit of risk. If you would invest 140.00 in Alternative Investment Trust on November 1, 2024 and sell it today you would earn a total of 7.00 from holding Alternative Investment Trust or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alternative Investment Trust vs. FireFly Metals
Performance |
| Timeline |
| Alternative Investment |
| FireFly Metals |
Alternative Investment and FireFly Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alternative Investment and FireFly Metals
The main advantage of trading using opposite Alternative Investment and FireFly Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternative Investment position performs unexpectedly, FireFly Metals 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 FireFly Metals will offset losses from the drop in FireFly Metals' long position.| Alternative Investment vs. EVE Health Group | Alternative Investment vs. Retail Food Group | Alternative Investment vs. Oneview Healthcare PLC | Alternative Investment vs. Regis Healthcare |
| FireFly Metals vs. Alternative Investment Trust | FireFly Metals vs. Charter Hall Retail | FireFly Metals vs. BlackWall Property Funds | FireFly Metals vs. Auctus Alternative Investments |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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