Correlation Between Firsthand Alternative and Driehaus Small/mid
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Driehaus Small/mid 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 Driehaus Small/mid 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 Driehaus Smallmid Cap, you can compare the effects of market volatilities on Firsthand Alternative and Driehaus Small/mid 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 Driehaus Small/mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Driehaus Small/mid.
Diversification Opportunities for Firsthand Alternative and Driehaus Small/mid
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Firsthand and Driehaus is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Driehaus Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Driehaus Smallmid Cap 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 Driehaus Small/mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Driehaus Smallmid Cap has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Driehaus Small/mid go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Driehaus Small/mid
Assuming the 90 days horizon Firsthand Alternative is expected to generate 1.91 times less return on investment than Driehaus Small/mid. In addition to that, Firsthand Alternative is 1.44 times more volatile than Driehaus Smallmid Cap. It trades about 0.03 of its total potential returns per unit of risk. Driehaus Smallmid Cap is currently generating about 0.07 per unit of volatility. If you would invest 1,707 in Driehaus Smallmid Cap on August 25, 2024 and sell it today you would earn a total of 294.00 from holding Driehaus Smallmid Cap or generate 17.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Driehaus Smallmid Cap
Performance |
| Timeline |
| Firsthand Alternative |
| Driehaus Smallmid Cap |
Firsthand Alternative and Driehaus Small/mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Driehaus Small/mid
The main advantage of trading using opposite Firsthand Alternative and Driehaus Small/mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Driehaus Small/mid 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 Driehaus Small/mid will offset losses from the drop in Driehaus Small/mid's long position.| Firsthand Alternative vs. Berkshire Focus | Firsthand Alternative vs. Red Oak Technology | Firsthand Alternative vs. Kinetics Internet Fund | Firsthand Alternative vs. Janus Global Technology |
| Driehaus Small/mid vs. Fidelity Advisor Energy | Driehaus Small/mid vs. Hennessy Bp Energy | Driehaus Small/mid vs. Gmo Resources | Driehaus Small/mid vs. Firsthand Alternative Energy |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets |