Correlation Between Firsthand Technology and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Firsthand Technology and Sterling Capital 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 Sterling Capital 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 Sterling Capital Porate, you can compare the effects of market volatilities on Firsthand Technology and Sterling Capital 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Technology and Sterling Capital.
Diversification Opportunities for Firsthand Technology and Sterling Capital
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Firsthand and Sterling is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Opportuni and Sterling Capital Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Porate 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Porate has no effect on the direction of Firsthand Technology i.e., Firsthand Technology and Sterling Capital go up and down completely randomly.
Pair Corralation between Firsthand Technology and Sterling Capital
Assuming the 90 days horizon Firsthand Technology Opportunities is expected to under-perform the Sterling Capital. In addition to that, Firsthand Technology is 2.33 times more volatile than Sterling Capital Porate. It trades about -0.03 of its total potential returns per unit of risk. Sterling Capital Porate is currently generating about 0.03 per unit of volatility. If you would invest 665.00 in Sterling Capital Porate on September 12, 2024 and sell it today you would earn a total of 46.00 from holding Sterling Capital Porate or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Technology Opportuni vs. Sterling Capital Porate
Performance |
| Timeline |
| Firsthand Technology |
| Sterling Capital Porate |
Firsthand Technology and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Technology and Sterling Capital
The main advantage of trading using opposite Firsthand Technology and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Technology position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital'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 |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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