Correlation Between Firsthand Alternative and Arbitrage Fund
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Arbitrage Fund 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 Arbitrage Fund 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 The Arbitrage Fund, you can compare the effects of market volatilities on Firsthand Alternative and Arbitrage Fund 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 Arbitrage Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Arbitrage Fund.
Diversification Opportunities for Firsthand Alternative and Arbitrage Fund
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Firsthand and Arbitrage is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and The Arbitrage Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrage Fund 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 Arbitrage Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrage Fund has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Arbitrage Fund go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Arbitrage Fund
Assuming the 90 days horizon Firsthand Alternative Energy is expected to under-perform the Arbitrage Fund. In addition to that, Firsthand Alternative is 5.25 times more volatile than The Arbitrage Fund. It trades about -0.06 of its total potential returns per unit of risk. The Arbitrage Fund is currently generating about -0.01 per unit of volatility. If you would invest 1,191 in The Arbitrage Fund on August 29, 2024 and sell it today you would lose (1.00) from holding The Arbitrage Fund or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. The Arbitrage Fund
Performance |
| Timeline |
| Firsthand Alternative |
| Arbitrage Fund |
Firsthand Alternative and Arbitrage Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Arbitrage Fund
The main advantage of trading using opposite Firsthand Alternative and Arbitrage Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Arbitrage Fund 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 Arbitrage Fund will offset losses from the drop in Arbitrage Fund's long position.| Firsthand Alternative vs. Red Oak Technology | Firsthand Alternative vs. Live Oak Health | Firsthand Alternative vs. HUMANA INC | Firsthand Alternative vs. Aquagold International |
| Arbitrage Fund vs. Energy Services Fund | Arbitrage Fund vs. Fidelity Advisor Energy | Arbitrage Fund vs. Firsthand Alternative Energy | Arbitrage Fund vs. Oil Gas Ultrasector |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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