Correlation Between Firsthand Alternative and Strategic Asset
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Strategic Asset 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 Strategic Asset 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 Strategic Asset Management, you can compare the effects of market volatilities on Firsthand Alternative and Strategic Asset 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 Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Strategic Asset.
Diversification Opportunities for Firsthand Alternative and Strategic Asset
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Firsthand and Strategic is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Strategic Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Asset Mana 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 Strategic Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Asset Mana has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Strategic Asset go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Strategic Asset
Assuming the 90 days horizon Firsthand Alternative is expected to generate 25.43 times less return on investment than Strategic Asset. In addition to that, Firsthand Alternative is 2.92 times more volatile than Strategic Asset Management. It trades about 0.0 of its total potential returns per unit of risk. Strategic Asset Management is currently generating about 0.12 per unit of volatility. If you would invest 1,705 in Strategic Asset Management on September 14, 2024 and sell it today you would earn a total of 320.00 from holding Strategic Asset Management or generate 18.77% 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. Strategic Asset Management
Performance |
| Timeline |
| Firsthand Alternative |
| Strategic Asset Mana |
Firsthand Alternative and Strategic Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Strategic Asset
The main advantage of trading using opposite Firsthand Alternative and Strategic Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Strategic Asset 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 Strategic Asset will offset losses from the drop in Strategic Asset's 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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