Correlation Between Black Oak and First Investors
Can any of the company-specific risk be diversified away by investing in both Black Oak and First 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 Black Oak and First Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Oak Emerging and First Investors Select, you can compare the effects of market volatilities on Black Oak and First 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 Black Oak with a short position of First Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Oak and First Investors.
Diversification Opportunities for Black Oak and First Investors
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Black and First is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Black Oak Emerging and First Investors Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Investors Select and Black Oak 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 Black Oak Emerging are associated (or correlated) with First Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Investors Select has no effect on the direction of Black Oak i.e., Black Oak and First Investors go up and down completely randomly.
Pair Corralation between Black Oak and First Investors
Assuming the 90 days horizon Black Oak Emerging is expected to under-perform the First Investors. In addition to that, Black Oak is 2.52 times more volatile than First Investors Select. It trades about -0.13 of its total potential returns per unit of risk. First Investors Select is currently generating about 0.16 per unit of volatility. If you would invest 1,306 in First Investors Select on October 24, 2024 and sell it today you would earn a total of 32.00 from holding First Investors Select or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Oak Emerging vs. First Investors Select
Performance |
| Timeline |
| Black Oak Emerging |
| First Investors Select |
Black Oak and First Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Oak and First Investors
The main advantage of trading using opposite Black Oak and First Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Oak position performs unexpectedly, First 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 First Investors will offset losses from the drop in First Investors' long position.| Black Oak vs. Red Oak Technology | Black Oak vs. Pin Oak Equity | Black Oak vs. White Oak Select | Black Oak vs. Live Oak Health |
| First Investors vs. Black Oak Emerging | First Investors vs. Catalystmillburn Hedge Strategy | First Investors vs. Barings Emerging Markets | First Investors vs. Mid Cap 15x Strategy |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |