Correlation Between First Advantage and Team
Can any of the company-specific risk be diversified away by investing in both First Advantage and Team 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 Team 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 Team Inc, you can compare the effects of market volatilities on First Advantage and Team 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 Team. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Advantage and Team.
Diversification Opportunities for First Advantage and Team
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and Team is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding First Advantage Corp and Team Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Team 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 Team. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Team Inc has no effect on the direction of First Advantage i.e., First Advantage and Team go up and down completely randomly.
Pair Corralation between First Advantage and Team
Allowing for the 90-day total investment horizon First Advantage Corp is expected to generate 0.27 times more return on investment than Team. However, First Advantage Corp is 3.76 times less risky than Team. It trades about 0.23 of its potential returns per unit of risk. Team Inc is currently generating about 0.0 per unit of risk. If you would invest 1,754 in First Advantage Corp on August 27, 2024 and sell it today you would earn a total of 235.00 from holding First Advantage Corp or generate 13.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Advantage Corp vs. Team Inc
Performance |
| Timeline |
| First Advantage Corp |
| Team Inc |
First Advantage and Team Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Advantage and Team
The main advantage of trading using opposite First Advantage and Team positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Advantage position performs unexpectedly, Team 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 Team will offset losses from the drop in Team'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 |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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