Correlation Between First Investors and Ivy Asset
Can any of the company-specific risk be diversified away by investing in both First Investors and Ivy Asset 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 Asset 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 Asset Strategy, you can compare the effects of market volatilities on First Investors and Ivy Asset 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 Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Investors and Ivy Asset.
Diversification Opportunities for First Investors and Ivy Asset
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Ivy is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding First Investors Select and Ivy Asset Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Asset Strategy 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 Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Asset Strategy has no effect on the direction of First Investors i.e., First Investors and Ivy Asset go up and down completely randomly.
Pair Corralation between First Investors and Ivy Asset
Assuming the 90 days horizon First Investors Select is expected to generate 1.57 times more return on investment than Ivy Asset. However, First Investors is 1.57 times more volatile than Ivy Asset Strategy. It trades about 0.19 of its potential returns per unit of risk. Ivy Asset Strategy is currently generating about 0.05 per unit of risk. If you would invest 1,237 in First Investors Select on August 29, 2024 and sell it today you would earn a total of 144.00 from holding First Investors Select or generate 11.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Investors Select vs. Ivy Asset Strategy
Performance |
| Timeline |
| First Investors Select |
| Ivy Asset Strategy |
First Investors and Ivy Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Investors and Ivy Asset
The main advantage of trading using opposite First Investors and Ivy Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Investors position performs unexpectedly, Ivy Asset 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 Asset will offset losses from the drop in Ivy Asset's long position.| First Investors vs. Tiaa Cref Real Estate | First Investors vs. Msif Real Estate | First Investors vs. Versus Capital Multi Manager | First Investors vs. Pender Real Estate |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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