Correlation Between First Advantage and Elis SA
Can any of the company-specific risk be diversified away by investing in both First Advantage and Elis SA 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 Elis SA 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 Elis SA, you can compare the effects of market volatilities on First Advantage and Elis SA 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 Elis SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Advantage and Elis SA.
Diversification Opportunities for First Advantage and Elis SA
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Elis is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding First Advantage Corp and Elis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elis SA 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 Elis SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elis SA has no effect on the direction of First Advantage i.e., First Advantage and Elis SA go up and down completely randomly.
Pair Corralation between First Advantage and Elis SA
Allowing for the 90-day total investment horizon First Advantage Corp is expected to generate 0.77 times more return on investment than Elis SA. However, First Advantage Corp is 1.3 times less risky than Elis SA. It trades about 0.04 of its potential returns per unit of risk. Elis SA is currently generating about -0.02 per unit of risk. If you would invest 1,661 in First Advantage Corp on November 3, 2024 and sell it today you would earn a total of 227.00 from holding First Advantage Corp or generate 13.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.02% |
| Values | Daily Returns |
First Advantage Corp vs. Elis SA
Performance |
| Timeline |
| First Advantage Corp |
| Elis SA |
First Advantage and Elis SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Advantage and Elis SA
The main advantage of trading using opposite First Advantage and Elis SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Advantage position performs unexpectedly, Elis SA 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 Elis SA will offset losses from the drop in Elis SA'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 |
| Elis SA vs. Maximus | Elis SA vs. Network 1 Technologies | Elis SA vs. First Advantage Corp | Elis SA vs. BrightView Holdings |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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