Correlation Between Firsthand Alternative and Capital Growth
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Capital Growth 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 Capital Growth 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 Capital Growth Fund, you can compare the effects of market volatilities on Firsthand Alternative and Capital Growth 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 Capital Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Capital Growth.
Diversification Opportunities for Firsthand Alternative and Capital Growth
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Firsthand and Capital is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Capital Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Growth 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 Capital Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Growth has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Capital Growth go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Capital Growth
Assuming the 90 days horizon Firsthand Alternative Energy is expected to under-perform the Capital Growth. In addition to that, Firsthand Alternative is 2.44 times more volatile than Capital Growth Fund. It trades about -0.1 of its total potential returns per unit of risk. Capital Growth Fund is currently generating about 0.02 per unit of volatility. If you would invest 1,467 in Capital Growth Fund on August 29, 2024 and sell it today you would earn a total of 8.00 from holding Capital Growth Fund or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Capital Growth Fund
Performance |
| Timeline |
| Firsthand Alternative |
| Capital Growth |
Firsthand Alternative and Capital Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Capital Growth
The main advantage of trading using opposite Firsthand Alternative and Capital Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Capital Growth 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 Capital Growth will offset losses from the drop in Capital Growth's long position.| Firsthand Alternative vs. Red Oak Technology | Firsthand Alternative vs. Live Oak Health | Firsthand Alternative vs. HUMANA INC | Firsthand Alternative vs. Aquagold International |
| Capital Growth vs. Commonwealth Australianew Zealand | Capital Growth vs. Commonwealth Japan Fund | Capital Growth vs. Commonwealth Real Estate | Capital Growth vs. HUMANA INC |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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