Correlation Between Firsthand Technology and Aig Government
Can any of the company-specific risk be diversified away by investing in both Firsthand Technology and Aig Government 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 Aig Government 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 Aig Government Money, you can compare the effects of market volatilities on Firsthand Technology and Aig Government 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 Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Technology and Aig Government.
Diversification Opportunities for Firsthand Technology and Aig Government
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Firsthand and Aig is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Opportuni and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money 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 Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Firsthand Technology i.e., Firsthand Technology and Aig Government go up and down completely randomly.
Pair Corralation between Firsthand Technology and Aig Government
Assuming the 90 days horizon Firsthand Technology Opportunities is expected to under-perform the Aig Government. In addition to that, Firsthand Technology is 9.28 times more volatile than Aig Government Money. It trades about -0.02 of its total potential returns per unit of risk. Aig Government Money is currently generating about 0.02 per unit of volatility. If you would invest 986.00 in Aig Government Money on October 30, 2024 and sell it today you would earn a total of 20.00 from holding Aig Government Money or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Technology Opportuni vs. Aig Government Money
Performance |
| Timeline |
| Firsthand Technology |
| Aig Government Money |
Firsthand Technology and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Technology and Aig Government
The main advantage of trading using opposite Firsthand Technology and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Technology position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government'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 |
| Aig Government vs. Stone Ridge Diversified | Aig Government vs. Wilmington Diversified Income | Aig Government vs. Lord Abbett Diversified | Aig Government vs. T Rowe Price |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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