Correlation Between First Investors and Ivy Small
Can any of the company-specific risk be diversified away by investing in both First Investors and Ivy Small 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 Investors and Ivy Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Investors Select and Ivy Small Cap, you can compare the effects of market volatilities on First Investors and Ivy Small 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 Investors with a short position of Ivy Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Investors and Ivy Small.
Diversification Opportunities for First Investors and Ivy Small
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Ivy is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding First Investors Select and Ivy Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Small Cap and First Investors 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 Investors Select are associated (or correlated) with Ivy Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Small Cap has no effect on the direction of First Investors i.e., First Investors and Ivy Small go up and down completely randomly.
Pair Corralation between First Investors and Ivy Small
Assuming the 90 days horizon First Investors Select is expected to generate 0.67 times more return on investment than Ivy Small. However, First Investors Select is 1.48 times less risky than Ivy Small. It trades about 0.12 of its potential returns per unit of risk. Ivy Small Cap is currently generating about 0.06 per unit of risk. If you would invest 870.00 in First Investors Select on August 26, 2024 and sell it today you would earn a total of 413.00 from holding First Investors Select or generate 47.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Investors Select vs. Ivy Small Cap
Performance |
| Timeline |
| First Investors Select |
| Ivy Small Cap |
First Investors and Ivy Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Investors and Ivy Small
The main advantage of trading using opposite First Investors and Ivy Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Investors position performs unexpectedly, Ivy Small 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 Ivy Small will offset losses from the drop in Ivy Small's long position.| First Investors vs. Fidelity Advisor Technology | First Investors vs. Firsthand Technology Opportunities | First Investors vs. Pgim Jennison Technology | First Investors vs. Science Technology Fund |
| Ivy Small vs. Baird Smallmid Cap | Ivy Small vs. Ancorathelen Small Mid Cap | Ivy Small vs. Small Pany Growth | Ivy Small vs. Qs Small Capitalization |
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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