Correlation Between Small Cap and Firsthand Alternative
Can any of the company-specific risk be diversified away by investing in both Small Cap and Firsthand Alternative 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 Small Cap and Firsthand Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Equity and Firsthand Alternative Energy, you can compare the effects of market volatilities on Small Cap and Firsthand Alternative 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 Small Cap with a short position of Firsthand Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Firsthand Alternative.
Diversification Opportunities for Small Cap and Firsthand Alternative
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Small and Firsthand is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Equity and Firsthand Alternative Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firsthand Alternative and Small Cap 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 Small Cap Equity are associated (or correlated) with Firsthand Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firsthand Alternative has no effect on the direction of Small Cap i.e., Small Cap and Firsthand Alternative go up and down completely randomly.
Pair Corralation between Small Cap and Firsthand Alternative
Assuming the 90 days horizon Small Cap Equity is expected to generate 0.69 times more return on investment than Firsthand Alternative. However, Small Cap Equity is 1.46 times less risky than Firsthand Alternative. It trades about 0.05 of its potential returns per unit of risk. Firsthand Alternative Energy is currently generating about 0.01 per unit of risk. If you would invest 1,675 in Small Cap Equity on September 12, 2024 and sell it today you would earn a total of 232.00 from holding Small Cap Equity or generate 13.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Equity vs. Firsthand Alternative Energy
Performance |
| Timeline |
| Small Cap Equity |
| Firsthand Alternative |
Small Cap and Firsthand Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Firsthand Alternative
The main advantage of trading using opposite Small Cap and Firsthand Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Firsthand Alternative 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 Firsthand Alternative will offset losses from the drop in Firsthand Alternative's long position.| Small Cap vs. Elfun Government Money | Small Cap vs. General Money Market | Small Cap vs. Ubs Money Series | Small Cap vs. Schwab Treasury Money |
| Firsthand Alternative vs. Guinness Atkinson Alternative | Firsthand Alternative vs. Calvert Global Energy | Firsthand Alternative vs. New Alternatives Fund | Firsthand Alternative vs. Shelton Green Alpha |
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.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| 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 |