Correlation Between First State and FutureNet
Can any of the company-specific risk be diversified away by investing in both First State and FutureNet 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 State and FutureNet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First State Financial and FutureNet, you can compare the effects of market volatilities on First State and FutureNet 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 State with a short position of FutureNet. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and FutureNet.
Diversification Opportunities for First State and FutureNet
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and FutureNet is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and FutureNet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FutureNet and First State 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 State Financial are associated (or correlated) with FutureNet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FutureNet has no effect on the direction of First State i.e., First State and FutureNet go up and down completely randomly.
Pair Corralation between First State and FutureNet
Given the investment horizon of 90 days First State Financial is expected to generate 1.25 times more return on investment than FutureNet. However, First State is 1.25 times more volatile than FutureNet. It trades about 0.03 of its potential returns per unit of risk. FutureNet is currently generating about -0.06 per unit of risk. If you would invest 3.69 in First State Financial on November 17, 2025 and sell it today you would lose (1.74) from holding First State Financial or give up 47.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
First State Financial vs. FutureNet
Performance |
| Timeline |
| First State Financial |
| FutureNet |
First State and FutureNet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and FutureNet
The main advantage of trading using opposite First State and FutureNet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, FutureNet 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 FutureNet will offset losses from the drop in FutureNet's long position.| First State vs. First Republic Bank | First State vs. BioCube | First State vs. Trend Exploration I | First State vs. Eastern Goldfields |
| FutureNet vs. XTM Inc | FutureNet vs. Kontrol Technologies Corp | FutureNet vs. Visionstate Corp | FutureNet vs. Carl Data Solutions |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |