Correlation Between First Investors and Optimum Small
Can any of the company-specific risk be diversified away by investing in both First Investors and Optimum 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 Optimum Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Investors Opportunity and Optimum Small Mid Cap, you can compare the effects of market volatilities on First Investors and Optimum 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 Optimum Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Investors and Optimum Small.
Diversification Opportunities for First Investors and Optimum Small
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Optimum is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding First Investors Opportunity and Optimum Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimum Small Mid 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 Opportunity are associated (or correlated) with Optimum Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimum Small Mid has no effect on the direction of First Investors i.e., First Investors and Optimum Small go up and down completely randomly.
Pair Corralation between First Investors and Optimum Small
Assuming the 90 days horizon First Investors Opportunity is expected to under-perform the Optimum Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, First Investors Opportunity is 1.72 times less risky than Optimum Small. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Optimum Small Mid Cap is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,225 in Optimum Small Mid Cap on September 14, 2024 and sell it today you would earn a total of 27.00 from holding Optimum Small Mid Cap or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
First Investors Opportunity vs. Optimum Small Mid Cap
Performance |
| Timeline |
| First Investors Oppo |
| Optimum Small Mid |
First Investors and Optimum Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Investors and Optimum Small
The main advantage of trading using opposite First Investors and Optimum Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Investors position performs unexpectedly, Optimum 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 Optimum Small will offset losses from the drop in Optimum Small's long position.| First Investors vs. Optimum Small Mid Cap | First Investors vs. Optimum Small Mid Cap | First Investors vs. Ivy Apollo Multi Asset | First Investors vs. Optimum Fixed Income |
| Optimum Small vs. Guggenheim High Yield | Optimum Small vs. Siit High Yield | Optimum Small vs. City National Rochdale | Optimum Small vs. Gmo High Yield |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |