Correlation Between Firsthand Technology and Guggenheim Managed
Can any of the company-specific risk be diversified away by investing in both Firsthand Technology and Guggenheim Managed 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 Guggenheim Managed 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 Guggenheim Managed Futures, you can compare the effects of market volatilities on Firsthand Technology and Guggenheim Managed 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 Guggenheim Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Technology and Guggenheim Managed.
Diversification Opportunities for Firsthand Technology and Guggenheim Managed
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Firsthand and Guggenheim is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Opportuni and Guggenheim Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Managed 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 Guggenheim Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Managed has no effect on the direction of Firsthand Technology i.e., Firsthand Technology and Guggenheim Managed go up and down completely randomly.
Pair Corralation between Firsthand Technology and Guggenheim Managed
Assuming the 90 days horizon Firsthand Technology Opportunities is expected to under-perform the Guggenheim Managed. In addition to that, Firsthand Technology is 2.37 times more volatile than Guggenheim Managed Futures. It trades about -0.01 of its total potential returns per unit of risk. Guggenheim Managed Futures is currently generating about 0.02 per unit of volatility. If you would invest 1,958 in Guggenheim Managed Futures on November 5, 2024 and sell it today you would earn a total of 92.00 from holding Guggenheim Managed Futures or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Technology Opportuni vs. Guggenheim Managed Futures
Performance |
| Timeline |
| Firsthand Technology |
| Guggenheim Managed |
Firsthand Technology and Guggenheim Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Technology and Guggenheim Managed
The main advantage of trading using opposite Firsthand Technology and Guggenheim Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Technology position performs unexpectedly, Guggenheim Managed 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 Guggenheim Managed will offset losses from the drop in Guggenheim Managed'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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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