Correlation Between First Advantage and Wilhelmina
Can any of the company-specific risk be diversified away by investing in both First Advantage and Wilhelmina 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 Wilhelmina 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 Wilhelmina, you can compare the effects of market volatilities on First Advantage and Wilhelmina 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 Wilhelmina. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Advantage and Wilhelmina.
Diversification Opportunities for First Advantage and Wilhelmina
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Wilhelmina is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding First Advantage Corp and Wilhelmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilhelmina 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 Wilhelmina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilhelmina has no effect on the direction of First Advantage i.e., First Advantage and Wilhelmina go up and down completely randomly.
Pair Corralation between First Advantage and Wilhelmina
Allowing for the 90-day total investment horizon First Advantage Corp is expected to generate 0.39 times more return on investment than Wilhelmina. However, First Advantage Corp is 2.53 times less risky than Wilhelmina. It trades about 0.06 of its potential returns per unit of risk. Wilhelmina is currently generating about 0.01 per unit of risk. If you would invest 1,217 in First Advantage Corp on October 21, 2024 and sell it today you would earn a total of 643.00 from holding First Advantage Corp or generate 52.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.18% |
| Values | Daily Returns |
First Advantage Corp vs. Wilhelmina
Performance |
| Timeline |
| First Advantage Corp |
| Wilhelmina |
First Advantage and Wilhelmina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Advantage and Wilhelmina
The main advantage of trading using opposite First Advantage and Wilhelmina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Advantage position performs unexpectedly, Wilhelmina 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 Wilhelmina will offset losses from the drop in Wilhelmina'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 |
| Wilhelmina vs. Network 1 Technologies | Wilhelmina vs. Rentokil Initial PLC | Wilhelmina vs. Mader Group Limited | Wilhelmina vs. SPAR Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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