Correlation Between Firsthand Technology and First Investors
Can any of the company-specific risk be diversified away by investing in both Firsthand Technology 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 Firsthand Technology and First Investors 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 First Investors Select, you can compare the effects of market volatilities on Firsthand Technology 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 Firsthand Technology with a short position of First Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Technology and First Investors.
Diversification Opportunities for Firsthand Technology and First Investors
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Firsthand and First is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Opportuni and First Investors Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Investors Select 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 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 Select has no effect on the direction of Firsthand Technology i.e., Firsthand Technology and First Investors go up and down completely randomly.
Pair Corralation between Firsthand Technology and First Investors
Assuming the 90 days horizon Firsthand Technology Opportunities is expected to under-perform the First Investors. In addition to that, Firsthand Technology is 2.77 times more volatile than First Investors Select. It trades about -0.04 of its total potential returns per unit of risk. First Investors Select is currently generating about 0.1 per unit of volatility. If you would invest 836.00 in First Investors Select on August 26, 2024 and sell it today you would earn a total of 447.00 from holding First Investors Select or generate 53.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Technology Opportuni vs. First Investors Select
Performance |
| Timeline |
| Firsthand Technology |
| First Investors Select |
Firsthand Technology and First Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Technology and First Investors
The main advantage of trading using opposite Firsthand Technology and First Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Technology 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.| Firsthand Technology vs. Berkshire Focus | Firsthand Technology vs. Red Oak Technology | Firsthand Technology vs. Kinetics Internet Fund | Firsthand Technology vs. Janus Global Technology |
| First Investors vs. Fidelity Advisor Technology | First Investors vs. Firsthand Technology Opportunities | First Investors vs. Pgim Jennison Technology | First Investors vs. Science Technology Fund |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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