Correlation Between Firsthand Alternative and Ab Government
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Ab Government 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 Firsthand Alternative and Ab Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firsthand Alternative Energy and Ab Government Exchange, you can compare the effects of market volatilities on Firsthand Alternative and Ab Government 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 Firsthand Alternative with a short position of Ab Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Ab Government.
Diversification Opportunities for Firsthand Alternative and Ab Government
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Firsthand and AEAXX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Ab Government Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Government Exchange and Firsthand Alternative 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 Firsthand Alternative Energy are associated (or correlated) with Ab Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Government Exchange has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Ab Government go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Ab Government
Assuming the 90 days horizon Firsthand Alternative Energy is expected to under-perform the Ab Government. But the mutual fund apears to be less risky and, when comparing its historical volatility, Firsthand Alternative Energy is 28.08 times less risky than Ab Government. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Ab Government Exchange is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 409.00 in Ab Government Exchange on October 12, 2024 and sell it today you would lose (309.00) from holding Ab Government Exchange or give up 75.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 51.72% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Ab Government Exchange
Performance |
| Timeline |
| Firsthand Alternative |
| Ab Government Exchange |
Firsthand Alternative and Ab Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Ab Government
The main advantage of trading using opposite Firsthand Alternative and Ab Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Ab Government 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 Government will offset losses from the drop in Ab Government's long position.| Firsthand Alternative vs. Guinness Atkinson Alternative | Firsthand Alternative vs. Calvert Global Energy | Firsthand Alternative vs. New Alternatives Fund | Firsthand Alternative vs. Shelton Green Alpha |
| Ab Government vs. Fidelity Advisor Energy | Ab Government vs. Salient Mlp Energy | Ab Government vs. Firsthand Alternative Energy | Ab Government vs. Short Oil Gas |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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