Correlation Between First State and Windfall Geotek
Can any of the company-specific risk be diversified away by investing in both First State and Windfall Geotek 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 Windfall Geotek 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 Windfall Geotek, you can compare the effects of market volatilities on First State and Windfall Geotek 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 Windfall Geotek. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and Windfall Geotek.
Diversification Opportunities for First State and Windfall Geotek
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Windfall is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and Windfall Geotek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Windfall Geotek 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 Windfall Geotek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Windfall Geotek has no effect on the direction of First State i.e., First State and Windfall Geotek go up and down completely randomly.
Pair Corralation between First State and Windfall Geotek
If you would invest 0.80 in Windfall Geotek on September 12, 2024 and sell it today you would earn a total of 0.25 from holding Windfall Geotek or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
First State Financial vs. Windfall Geotek
Performance |
| Timeline |
| First State Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Windfall Geotek |
First State and Windfall Geotek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and Windfall Geotek
The main advantage of trading using opposite First State and Windfall Geotek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, Windfall Geotek 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 Windfall Geotek will offset losses from the drop in Windfall Geotek'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 |
| Windfall Geotek vs. AB International Group | Windfall Geotek vs. Image Protect | Windfall Geotek vs. Bowmo Inc | Windfall Geotek vs. Protek Capital |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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