Correlation Between First Advantage and International Money
Can any of the company-specific risk be diversified away by investing in both First Advantage and International Money 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 International Money 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 International Money Express, you can compare the effects of market volatilities on First Advantage and International Money 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 International Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Advantage and International Money.
Diversification Opportunities for First Advantage and International Money
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and International is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding First Advantage Corp and International Money Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Money 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 International Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Money has no effect on the direction of First Advantage i.e., First Advantage and International Money go up and down completely randomly.
Pair Corralation between First Advantage and International Money
Allowing for the 90-day total investment horizon First Advantage is expected to generate 5.21 times less return on investment than International Money. But when comparing it to its historical volatility, First Advantage Corp is 1.12 times less risky than International Money. It trades about 0.07 of its potential returns per unit of risk. International Money Express is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,753 in International Money Express on August 31, 2024 and sell it today you would earn a total of 357.00 from holding International Money Express or generate 20.37% 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. International Money Express
Performance |
| Timeline |
| First Advantage Corp |
| International Money |
First Advantage and International Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Advantage and International Money
The main advantage of trading using opposite First Advantage and International Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Advantage position performs unexpectedly, International Money 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 International Money will offset losses from the drop in International Money'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 |
| International Money vs. NetScout Systems | International Money vs. Consensus Cloud Solutions | International Money vs. CSG Systems International | International Money vs. EverCommerce |
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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