Correlation Between First Advantage and Fuel Tech
Can any of the company-specific risk be diversified away by investing in both First Advantage and Fuel Tech 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 Fuel Tech 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 Fuel Tech, you can compare the effects of market volatilities on First Advantage and Fuel Tech 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 Fuel Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Advantage and Fuel Tech.
Diversification Opportunities for First Advantage and Fuel Tech
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Fuel is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding First Advantage Corp and Fuel Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuel Tech 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 Fuel Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuel Tech has no effect on the direction of First Advantage i.e., First Advantage and Fuel Tech go up and down completely randomly.
Pair Corralation between First Advantage and Fuel Tech
Allowing for the 90-day total investment horizon First Advantage Corp is expected to generate 0.72 times more return on investment than Fuel Tech. However, First Advantage Corp is 1.38 times less risky than Fuel Tech. It trades about 0.08 of its potential returns per unit of risk. Fuel Tech is currently generating about -0.02 per unit of risk. If you would invest 1,238 in First Advantage Corp on August 31, 2024 and sell it today you would earn a total of 685.00 from holding First Advantage Corp or generate 55.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Advantage Corp vs. Fuel Tech
Performance |
| Timeline |
| First Advantage Corp |
| Fuel Tech |
First Advantage and Fuel Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Advantage and Fuel Tech
The main advantage of trading using opposite First Advantage and Fuel Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Advantage position performs unexpectedly, Fuel Tech 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 Fuel Tech will offset losses from the drop in Fuel Tech'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 |
| Fuel Tech vs. Federal Signal | Fuel Tech vs. CECO Environmental Corp | Fuel Tech vs. Zurn Elkay Water | Fuel Tech vs. Greenlane Renewables |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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