Correlation Between Firsthand Alternative and Columbia Acorn
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Columbia Acorn 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 Columbia Acorn 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 Columbia Acorn International, you can compare the effects of market volatilities on Firsthand Alternative and Columbia Acorn 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 Columbia Acorn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Columbia Acorn.
Diversification Opportunities for Firsthand Alternative and Columbia Acorn
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Firsthand and Columbia is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Columbia Acorn International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Acorn Inter 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 Columbia Acorn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Acorn Inter has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Columbia Acorn go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Columbia Acorn
Assuming the 90 days horizon Firsthand Alternative Energy is expected to generate 1.8 times more return on investment than Columbia Acorn. However, Firsthand Alternative is 1.8 times more volatile than Columbia Acorn International. It trades about 0.14 of its potential returns per unit of risk. Columbia Acorn International is currently generating about -0.06 per unit of risk. If you would invest 999.00 in Firsthand Alternative Energy on September 4, 2024 and sell it today you would earn a total of 41.00 from holding Firsthand Alternative Energy or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Columbia Acorn International
Performance |
| Timeline |
| Firsthand Alternative |
| Columbia Acorn Inter |
Firsthand Alternative and Columbia Acorn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Columbia Acorn
The main advantage of trading using opposite Firsthand Alternative and Columbia Acorn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Columbia Acorn 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 Columbia Acorn will offset losses from the drop in Columbia Acorn'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 |
| Columbia Acorn vs. Qs Large Cap | Columbia Acorn vs. Issachar Fund Class | Columbia Acorn vs. Rbb Fund | Columbia Acorn vs. Nationwide Global Equity |
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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