Correlation Between Victory High and Firsthand Alternative
Can any of the company-specific risk be diversified away by investing in both Victory High 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 Victory High and Firsthand Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory High Yield and Firsthand Alternative Energy, you can compare the effects of market volatilities on Victory High 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 Victory High with a short position of Firsthand Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory High and Firsthand Alternative.
Diversification Opportunities for Victory High and Firsthand Alternative
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Victory and Firsthand is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Victory High Yield and Firsthand Alternative Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firsthand Alternative and Victory High 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 Victory High Yield 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 Victory High i.e., Victory High and Firsthand Alternative go up and down completely randomly.
Pair Corralation between Victory High and Firsthand Alternative
Assuming the 90 days horizon Victory High is expected to generate 7.62 times less return on investment than Firsthand Alternative. But when comparing it to its historical volatility, Victory High Yield is 9.15 times less risky than Firsthand Alternative. It trades about 0.2 of its potential returns per unit of risk. Firsthand Alternative Energy is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 985.00 in Firsthand Alternative Energy on September 13, 2024 and sell it today you would earn a total of 40.00 from holding Firsthand Alternative Energy or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory High Yield vs. Firsthand Alternative Energy
Performance |
| Timeline |
| Victory High Yield |
| Firsthand Alternative |
Victory High and Firsthand Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory High and Firsthand Alternative
The main advantage of trading using opposite Victory High and Firsthand Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory High 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.| Victory High vs. Firsthand Alternative Energy | Victory High vs. Goehring Rozencwajg Resources | Victory High vs. Oil Gas Ultrasector | Victory High vs. Adams Natural Resources |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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