Correlation Between Firsthand Technology and Ab Global
Can any of the company-specific risk be diversified away by investing in both Firsthand Technology and Ab Global 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 Ab Global 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 Ab Global E, you can compare the effects of market volatilities on Firsthand Technology and Ab Global 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 Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Technology and Ab Global.
Diversification Opportunities for Firsthand Technology and Ab Global
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FIRSTHAND and GCEAX is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Opportuni and Ab Global E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global E 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 Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global E has no effect on the direction of Firsthand Technology i.e., Firsthand Technology and Ab Global go up and down completely randomly.
Pair Corralation between Firsthand Technology and Ab Global
Assuming the 90 days horizon Firsthand Technology Opportunities is expected to under-perform the Ab Global. In addition to that, Firsthand Technology is 2.46 times more volatile than Ab Global E. It trades about -0.02 of its total potential returns per unit of risk. Ab Global E is currently generating about 0.07 per unit of volatility. If you would invest 1,418 in Ab Global E on September 1, 2024 and sell it today you would earn a total of 370.00 from holding Ab Global E or generate 26.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Firsthand Technology Opportuni vs. Ab Global E
Performance |
| Timeline |
| Firsthand Technology |
| Ab Global E |
Firsthand Technology and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Technology and Ab Global
The main advantage of trading using opposite Firsthand Technology and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Technology position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global'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 |
| Ab Global vs. Ab Global E | Ab Global vs. Ab Global E | Ab Global vs. Ab Virginia Portfolio | Ab Global vs. Ab Virginia Portfolio |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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