Correlation Between Hawaii Municipal and Firsthand Technology
Can any of the company-specific risk be diversified away by investing in both Hawaii Municipal and Firsthand Technology 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 Hawaii Municipal and Firsthand Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaii Municipal Bond and Firsthand Technology Opportunities, you can compare the effects of market volatilities on Hawaii Municipal and Firsthand Technology 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 Hawaii Municipal with a short position of Firsthand Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaii Municipal and Firsthand Technology.
Diversification Opportunities for Hawaii Municipal and Firsthand Technology
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hawaii and Firsthand is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hawaii Municipal Bond and Firsthand Technology Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firsthand Technology and Hawaii Municipal 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 Hawaii Municipal Bond are associated (or correlated) with Firsthand Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firsthand Technology has no effect on the direction of Hawaii Municipal i.e., Hawaii Municipal and Firsthand Technology go up and down completely randomly.
Pair Corralation between Hawaii Municipal and Firsthand Technology
Assuming the 90 days horizon Hawaii Municipal Bond is expected to generate 0.1 times more return on investment than Firsthand Technology. However, Hawaii Municipal Bond is 10.48 times less risky than Firsthand Technology. It trades about 0.02 of its potential returns per unit of risk. Firsthand Technology Opportunities is currently generating about -0.02 per unit of risk. If you would invest 969.00 in Hawaii Municipal Bond on October 25, 2024 and sell it today you would earn a total of 16.00 from holding Hawaii Municipal Bond or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawaii Municipal Bond vs. Firsthand Technology Opportuni
Performance |
| Timeline |
| Hawaii Municipal Bond |
| Firsthand Technology |
Hawaii Municipal and Firsthand Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaii Municipal and Firsthand Technology
The main advantage of trading using opposite Hawaii Municipal and Firsthand Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaii Municipal position performs unexpectedly, Firsthand Technology 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 Firsthand Technology will offset losses from the drop in Firsthand Technology's long position.| Hawaii Municipal vs. Firsthand Technology Opportunities | Hawaii Municipal vs. Red Oak Technology | Hawaii Municipal vs. Blackrock Science Technology | Hawaii Municipal vs. Dreyfus Technology Growth |
| Firsthand Technology vs. Berkshire Focus | Firsthand Technology vs. Red Oak Technology | Firsthand Technology vs. Jacob Internet Fund | Firsthand Technology 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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