Correlation Between Firsthand Alternative and Low-duration Bond
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Low-duration Bond 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 Low-duration Bond 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 Low Duration Bond Institutional, you can compare the effects of market volatilities on Firsthand Alternative and Low-duration Bond 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 Low-duration Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Low-duration Bond.
Diversification Opportunities for Firsthand Alternative and Low-duration Bond
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Firsthand and Low-duration is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Low Duration Bond Institutiona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Low Duration Bond 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 Low-duration Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Low Duration Bond has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Low-duration Bond go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Low-duration Bond
Assuming the 90 days horizon Firsthand Alternative Energy is expected to under-perform the Low-duration Bond. In addition to that, Firsthand Alternative is 11.48 times more volatile than Low Duration Bond Institutional. It trades about -0.51 of its total potential returns per unit of risk. Low Duration Bond Institutional is currently generating about 0.14 per unit of volatility. If you would invest 1,288 in Low Duration Bond Institutional on December 1, 2024 and sell it today you would earn a total of 4.00 from holding Low Duration Bond Institutional or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Low Duration Bond Institutiona
Performance |
| Timeline |
| Firsthand Alternative |
| Low Duration Bond |
Firsthand Alternative and Low-duration Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Low-duration Bond
The main advantage of trading using opposite Firsthand Alternative and Low-duration Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Low-duration Bond 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 Low-duration Bond will offset losses from the drop in Low-duration Bond'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 |
| Low-duration Bond vs. Fidelity Series Government | Low-duration Bond vs. Dunham Porategovernment Bond | Low-duration Bond vs. Virtus Seix Government | Low-duration Bond vs. Us Government Securities |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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