Correlation Between Firsthand Alternative and Massachusetts Investors
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Massachusetts Investors 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 Massachusetts Investors 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 Massachusetts Investors Growth, you can compare the effects of market volatilities on Firsthand Alternative and Massachusetts Investors 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 Massachusetts Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Massachusetts Investors.
Diversification Opportunities for Firsthand Alternative and Massachusetts Investors
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Firsthand and Massachusetts is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Massachusetts Investors Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massachusetts Investors 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 Massachusetts Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massachusetts Investors has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Massachusetts Investors go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Massachusetts Investors
Assuming the 90 days horizon Firsthand Alternative Energy is expected to generate 2.35 times more return on investment than Massachusetts Investors. However, Firsthand Alternative is 2.35 times more volatile than Massachusetts Investors Growth. It trades about 0.14 of its potential returns per unit of risk. Massachusetts Investors Growth is currently generating about 0.15 per unit of risk. If you would invest 969.00 in Firsthand Alternative Energy on September 15, 2024 and sell it today you would earn a total of 34.00 from holding Firsthand Alternative Energy or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Massachusetts Investors Growth
Performance |
| Timeline |
| Firsthand Alternative |
| Massachusetts Investors |
Firsthand Alternative and Massachusetts Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Massachusetts Investors
The main advantage of trading using opposite Firsthand Alternative and Massachusetts Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Massachusetts Investors 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 Massachusetts Investors will offset losses from the drop in Massachusetts Investors' long position.| Firsthand Alternative vs. Berkshire Focus | Firsthand Alternative vs. Red Oak Technology | Firsthand Alternative vs. Jacob Internet Fund | Firsthand Alternative vs. Kinetics Internet Fund |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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