Correlation Between Firsthand Technology and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Firsthand Technology and Eaton Vance 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 Firsthand Technology and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firsthand Technology Opportunities and Eaton Vance Large Cap, you can compare the effects of market volatilities on Firsthand Technology and Eaton Vance 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 Firsthand Technology with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Technology and Eaton Vance.
Diversification Opportunities for Firsthand Technology and Eaton Vance
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Firsthand and Eaton is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Opportuni and Eaton Vance Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Large and Firsthand Technology 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 Firsthand Technology Opportunities are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Large has no effect on the direction of Firsthand Technology i.e., Firsthand Technology and Eaton Vance go up and down completely randomly.
Pair Corralation between Firsthand Technology and Eaton Vance
Assuming the 90 days horizon Firsthand Technology Opportunities is expected to generate 2.26 times more return on investment than Eaton Vance. However, Firsthand Technology is 2.26 times more volatile than Eaton Vance Large Cap. It trades about 0.12 of its potential returns per unit of risk. Eaton Vance Large Cap is currently generating about 0.22 per unit of risk. If you would invest 394.00 in Firsthand Technology Opportunities on November 6, 2024 and sell it today you would earn a total of 14.00 from holding Firsthand Technology Opportunities or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Technology Opportuni vs. Eaton Vance Large Cap
Performance |
| Timeline |
| Firsthand Technology |
| Eaton Vance Large |
Firsthand Technology and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Technology and Eaton Vance
The main advantage of trading using opposite Firsthand Technology and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Technology position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.| Firsthand Technology vs. Berkshire Focus | Firsthand Technology vs. Red Oak Technology | Firsthand Technology vs. Jacob Internet Fund | Firsthand Technology vs. Kinetics Internet Fund |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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