Correlation Between First State and PowerFleet
Can any of the company-specific risk be diversified away by investing in both First State and PowerFleet 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 PowerFleet 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 PowerFleet, you can compare the effects of market volatilities on First State and PowerFleet 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 PowerFleet. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and PowerFleet.
Diversification Opportunities for First State and PowerFleet
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and PowerFleet is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and PowerFleet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PowerFleet 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 PowerFleet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PowerFleet has no effect on the direction of First State i.e., First State and PowerFleet go up and down completely randomly.
Pair Corralation between First State and PowerFleet
Given the investment horizon of 90 days First State Financial is expected to generate 5.73 times more return on investment than PowerFleet. However, First State is 5.73 times more volatile than PowerFleet. It trades about 0.17 of its potential returns per unit of risk. PowerFleet is currently generating about 0.05 per unit of risk. If you would invest 2.11 in First State Financial on September 1, 2024 and sell it today you would earn a total of 2.36 from holding First State Financial or generate 111.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 10.91% |
| Values | Daily Returns |
First State Financial vs. PowerFleet
Performance |
| Timeline |
| First State Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PowerFleet |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First State and PowerFleet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and PowerFleet
The main advantage of trading using opposite First State and PowerFleet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, PowerFleet 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 PowerFleet will offset losses from the drop in PowerFleet's long position.| First State vs. First Interstate BancSystem | First State vs. First Financial Bankshares | First State vs. Independent Bank Group | First State vs. CVB Financial |
| PowerFleet vs. KVH Industries | PowerFleet vs. Comtech Telecommunications Corp | PowerFleet vs. ADTRAN Inc | PowerFleet vs. Digi International |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |