Correlation Between International Investors and First Investors
Can any of the company-specific risk be diversified away by investing in both International Investors and First Investors 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 International Investors and First Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Investors Gold and First Investors Growth, you can compare the effects of market volatilities on International Investors and First Investors 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 International Investors with a short position of First Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and First Investors.
Diversification Opportunities for International Investors and First Investors
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between International and First is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and First Investors Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Investors Growth and International 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 International Investors Gold are associated (or correlated) with First Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Investors Growth has no effect on the direction of International Investors i.e., International Investors and First Investors go up and down completely randomly.
Pair Corralation between International Investors and First Investors
Assuming the 90 days horizon International Investors Gold is expected to under-perform the First Investors. In addition to that, International Investors is 2.15 times more volatile than First Investors Growth. It trades about -0.15 of its total potential returns per unit of risk. First Investors Growth is currently generating about 0.34 per unit of volatility. If you would invest 1,603 in First Investors Growth on September 4, 2024 and sell it today you would earn a total of 108.00 from holding First Investors Growth or generate 6.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Investors Gold vs. First Investors Growth
Performance |
| Timeline |
| International Investors |
| First Investors Growth |
International Investors and First Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and First Investors
The main advantage of trading using opposite International Investors and First Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors position performs unexpectedly, First Investors 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 First Investors will offset losses from the drop in First Investors' long position.| International Investors vs. Ambrus Core Bond | International Investors vs. The National Tax Free | International Investors vs. California Bond Fund | International Investors vs. T Rowe Price |
| 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 |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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