Correlation Between Firsthand Alternative and Virginia Bond
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Virginia 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 Virginia 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 Virginia Bond Fund, you can compare the effects of market volatilities on Firsthand Alternative and Virginia 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 Virginia Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Virginia Bond.
Diversification Opportunities for Firsthand Alternative and Virginia Bond
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Firsthand and Virginia is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Virginia Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virginia 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 Virginia Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virginia Bond has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Virginia Bond go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Virginia Bond
Assuming the 90 days horizon Firsthand Alternative Energy is expected to under-perform the Virginia Bond. In addition to that, Firsthand Alternative is 5.87 times more volatile than Virginia Bond Fund. It trades about -0.02 of its total potential returns per unit of risk. Virginia Bond Fund is currently generating about 0.07 per unit of volatility. If you would invest 1,038 in Virginia Bond Fund on October 25, 2024 and sell it today you would earn a total of 4.00 from holding Virginia Bond Fund or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Virginia Bond Fund
Performance |
| Timeline |
| Firsthand Alternative |
| Virginia Bond |
Firsthand Alternative and Virginia Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Virginia Bond
The main advantage of trading using opposite Firsthand Alternative and Virginia Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Virginia 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 Virginia Bond will offset losses from the drop in Virginia 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 |
| Virginia Bond vs. Putnam Money Market | Virginia Bond vs. Aig Government Money | Virginia Bond vs. Hewitt Money Market | Virginia Bond vs. Dws Government Money |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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