Correlation Between Oil Gas and Firsthand Alternative
Can any of the company-specific risk be diversified away by investing in both Oil Gas and Firsthand Alternative 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 Oil Gas and Firsthand Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Gas Ultrasector and Firsthand Alternative Energy, you can compare the effects of market volatilities on Oil Gas and Firsthand Alternative 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 Oil Gas with a short position of Firsthand Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Gas and Firsthand Alternative.
Diversification Opportunities for Oil Gas and Firsthand Alternative
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oil and Firsthand is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector and Firsthand Alternative Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firsthand Alternative and Oil Gas 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 Oil Gas Ultrasector are associated (or correlated) with Firsthand Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firsthand Alternative has no effect on the direction of Oil Gas i.e., Oil Gas and Firsthand Alternative go up and down completely randomly.
Pair Corralation between Oil Gas and Firsthand Alternative
Assuming the 90 days horizon Oil Gas Ultrasector is expected to generate 1.12 times more return on investment than Firsthand Alternative. However, Oil Gas is 1.12 times more volatile than Firsthand Alternative Energy. It trades about 0.24 of its potential returns per unit of risk. Firsthand Alternative Energy is currently generating about -0.02 per unit of risk. If you would invest 3,685 in Oil Gas Ultrasector on August 24, 2024 and sell it today you would earn a total of 328.00 from holding Oil Gas Ultrasector or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil Gas Ultrasector vs. Firsthand Alternative Energy
Performance |
| Timeline |
| Oil Gas Ultrasector |
| Firsthand Alternative |
Oil Gas and Firsthand Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Gas and Firsthand Alternative
The main advantage of trading using opposite Oil Gas and Firsthand Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Gas position performs unexpectedly, Firsthand Alternative 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 Alternative will offset losses from the drop in Firsthand Alternative's long position.| Oil Gas vs. Nasdaq 100 2x Strategy | Oil Gas vs. Nasdaq 100 2x Strategy | Oil Gas vs. Nasdaq 100 2x Strategy | Oil Gas vs. Ultra Nasdaq 100 Profunds |
| Firsthand Alternative vs. Guinness Atkinson Alternative | Firsthand Alternative vs. Calvert Global Energy | Firsthand Alternative vs. New Alternatives Fund | Firsthand Alternative vs. Shelton Green Alpha |
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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