Correlation Between First Advantage and PFSweb
Can any of the company-specific risk be diversified away by investing in both First Advantage and PFSweb 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 PFSweb 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 PFSweb Inc, you can compare the effects of market volatilities on First Advantage and PFSweb 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 PFSweb. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Advantage and PFSweb.
Diversification Opportunities for First Advantage and PFSweb
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and PFSweb is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding First Advantage Corp and PFSweb Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFSweb Inc 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 PFSweb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PFSweb Inc has no effect on the direction of First Advantage i.e., First Advantage and PFSweb go up and down completely randomly.
Pair Corralation between First Advantage and PFSweb
Allowing for the 90-day total investment horizon First Advantage Corp is expected to generate 0.52 times more return on investment than PFSweb. However, First Advantage Corp is 1.94 times less risky than PFSweb. It trades about 0.06 of its potential returns per unit of risk. PFSweb Inc is currently generating about -0.04 per unit of risk. If you would invest 1,203 in First Advantage Corp on August 27, 2024 and sell it today you would earn a total of 707.00 from holding First Advantage Corp or generate 58.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.85% |
| Values | Daily Returns |
First Advantage Corp vs. PFSweb Inc
Performance |
| Timeline |
| First Advantage Corp |
| PFSweb Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Advantage and PFSweb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Advantage and PFSweb
The main advantage of trading using opposite First Advantage and PFSweb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Advantage position performs unexpectedly, PFSweb 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 PFSweb will offset losses from the drop in PFSweb'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 |
| PFSweb vs. Network 1 Technologies | PFSweb vs. Rentokil Initial PLC | PFSweb vs. Cass Information Systems | PFSweb vs. Maximus |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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