Correlation Between First Advantage and Manhattan Associates
Can any of the company-specific risk be diversified away by investing in both First Advantage and Manhattan Associates 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 Manhattan Associates 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 Manhattan Associates, you can compare the effects of market volatilities on First Advantage and Manhattan Associates 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 Manhattan Associates. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Advantage and Manhattan Associates.
Diversification Opportunities for First Advantage and Manhattan Associates
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and Manhattan is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding First Advantage Corp and Manhattan Associates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manhattan Associates 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 Manhattan Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manhattan Associates has no effect on the direction of First Advantage i.e., First Advantage and Manhattan Associates go up and down completely randomly.
Pair Corralation between First Advantage and Manhattan Associates
Allowing for the 90-day total investment horizon First Advantage Corp is expected to under-perform the Manhattan Associates. In addition to that, First Advantage is 1.2 times more volatile than Manhattan Associates. It trades about -0.3 of its total potential returns per unit of risk. Manhattan Associates is currently generating about -0.23 per unit of volatility. If you would invest 20,028 in Manhattan Associates on December 4, 2024 and sell it today you would lose (2,853) from holding Manhattan Associates or give up 14.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
First Advantage Corp vs. Manhattan Associates
Performance |
| Timeline |
| First Advantage Corp |
| Manhattan Associates |
First Advantage and Manhattan Associates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Advantage and Manhattan Associates
The main advantage of trading using opposite First Advantage and Manhattan Associates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Advantage position performs unexpectedly, Manhattan Associates 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 Manhattan Associates will offset losses from the drop in Manhattan Associates' 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 |
| Manhattan Associates vs. Blackbaud | Manhattan Associates vs. Bentley Systems | Manhattan Associates vs. Paylocity Holdng | Manhattan Associates vs. ANSYS Inc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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