Correlation Between First Advantage and Exchange Traded
Can any of the company-specific risk be diversified away by investing in both First Advantage and Exchange Traded 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 First Advantage and Exchange Traded into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Advantage Corp and Exchange Traded Concepts, you can compare the effects of market volatilities on First Advantage and Exchange Traded 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 First Advantage with a short position of Exchange Traded. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Advantage and Exchange Traded.
Diversification Opportunities for First Advantage and Exchange Traded
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Exchange is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding First Advantage Corp and Exchange Traded Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Traded Concepts and First Advantage 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 First Advantage Corp are associated (or correlated) with Exchange Traded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Traded Concepts has no effect on the direction of First Advantage i.e., First Advantage and Exchange Traded go up and down completely randomly.
Pair Corralation between First Advantage and Exchange Traded
Allowing for the 90-day total investment horizon First Advantage Corp is expected to generate 1.33 times more return on investment than Exchange Traded. However, First Advantage is 1.33 times more volatile than Exchange Traded Concepts. It trades about 0.06 of its potential returns per unit of risk. Exchange Traded Concepts is currently generating about -0.01 per unit of risk. If you would invest 1,208 in First Advantage Corp on August 29, 2024 and sell it today you would earn a total of 720.00 from holding First Advantage Corp or generate 59.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.94% |
| Values | Daily Returns |
First Advantage Corp vs. Exchange Traded Concepts
Performance |
| Timeline |
| First Advantage Corp |
| Exchange Traded Concepts |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
First Advantage and Exchange Traded Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Advantage and Exchange Traded
The main advantage of trading using opposite First Advantage and Exchange Traded positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Advantage position performs unexpectedly, Exchange Traded 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 Exchange Traded will offset losses from the drop in Exchange Traded's long position.| First Advantage vs. Discount Print USA | First Advantage vs. Cass Information Systems | First Advantage vs. Civeo Corp | First Advantage vs. Network 1 Technologies |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |