Correlation Between Firsthand Alternative and Invesco Energy
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Invesco Energy 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 Invesco Energy 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 Invesco Energy Fund, you can compare the effects of market volatilities on Firsthand Alternative and Invesco Energy 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 Invesco Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Invesco Energy.
Diversification Opportunities for Firsthand Alternative and Invesco Energy
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Firsthand and Invesco is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Invesco Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Energy 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 Invesco Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Energy has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Invesco Energy go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Invesco Energy
Assuming the 90 days horizon Firsthand Alternative Energy is expected to under-perform the Invesco Energy. In addition to that, Firsthand Alternative is 1.76 times more volatile than Invesco Energy Fund. It trades about -0.03 of its total potential returns per unit of risk. Invesco Energy Fund is currently generating about 0.4 per unit of volatility. If you would invest 2,494 in Invesco Energy Fund on August 27, 2024 and sell it today you would earn a total of 184.00 from holding Invesco Energy Fund or generate 7.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Invesco Energy Fund
Performance |
| Timeline |
| Firsthand Alternative |
| Invesco Energy |
Firsthand Alternative and Invesco Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Invesco Energy
The main advantage of trading using opposite Firsthand Alternative and Invesco Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Invesco Energy 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 Invesco Energy will offset losses from the drop in Invesco Energy'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 |
| Invesco Energy vs. Gmo Emerging Country | Invesco Energy vs. Vanguard Global Credit | Invesco Energy vs. Artisan Emerging Markets | Invesco Energy vs. Fundvantage Trust |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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