Correlation Between Firsthand Technology and Northern Small
Can any of the company-specific risk be diversified away by investing in both Firsthand Technology and Northern Small 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 Northern Small 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 Northern Small Cap, you can compare the effects of market volatilities on Firsthand Technology and Northern Small 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 Northern Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Technology and Northern Small.
Diversification Opportunities for Firsthand Technology and Northern Small
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Firsthand and Northern is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Opportuni and Northern Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Small Cap 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 Northern Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Small Cap has no effect on the direction of Firsthand Technology i.e., Firsthand Technology and Northern Small go up and down completely randomly.
Pair Corralation between Firsthand Technology and Northern Small
Assuming the 90 days horizon Firsthand Technology Opportunities is expected to under-perform the Northern Small. In addition to that, Firsthand Technology is 1.32 times more volatile than Northern Small Cap. It trades about -0.03 of its total potential returns per unit of risk. Northern Small Cap is currently generating about 0.09 per unit of volatility. If you would invest 2,525 in Northern Small Cap on September 4, 2024 and sell it today you would earn a total of 736.00 from holding Northern Small Cap or generate 29.15% 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. Northern Small Cap
Performance |
| Timeline |
| Firsthand Technology |
| Northern Small Cap |
Firsthand Technology and Northern Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Technology and Northern Small
The main advantage of trading using opposite Firsthand Technology and Northern Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Technology position performs unexpectedly, Northern Small 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 Northern Small will offset losses from the drop in Northern Small'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 |
| Northern Small vs. Northern Bond Index | Northern Small vs. Northern E Bond | Northern Small vs. Northern Fixed Income | Northern Small vs. Northern Income Equity |
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 CEOs Directory module to screen CEOs from public companies around the world.
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