Correlation Between First Asset and Ninepoint Energy
Can any of the company-specific risk be diversified away by investing in both First Asset and Ninepoint Energy 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 First Asset and Ninepoint Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Asset Tech and Ninepoint Energy, you can compare the effects of market volatilities on First Asset and Ninepoint Energy 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 First Asset with a short position of Ninepoint Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Asset and Ninepoint Energy.
Diversification Opportunities for First Asset and Ninepoint Energy
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Ninepoint is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding First Asset Tech and Ninepoint Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ninepoint Energy and First Asset 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 First Asset Tech are associated (or correlated) with Ninepoint Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ninepoint Energy has no effect on the direction of First Asset i.e., First Asset and Ninepoint Energy go up and down completely randomly.
Pair Corralation between First Asset and Ninepoint Energy
Assuming the 90 days trading horizon First Asset Tech is expected to generate 0.73 times more return on investment than Ninepoint Energy. However, First Asset Tech is 1.37 times less risky than Ninepoint Energy. It trades about 0.1 of its potential returns per unit of risk. Ninepoint Energy is currently generating about 0.02 per unit of risk. If you would invest 1,199 in First Asset Tech on September 3, 2024 and sell it today you would earn a total of 992.00 from holding First Asset Tech or generate 82.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Asset Tech vs. Ninepoint Energy
Performance |
| Timeline |
| First Asset Tech |
| Ninepoint Energy |
First Asset and Ninepoint Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Asset and Ninepoint Energy
The main advantage of trading using opposite First Asset and Ninepoint Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Asset position performs unexpectedly, Ninepoint Energy 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 Ninepoint Energy will offset losses from the drop in Ninepoint Energy's long position.| First Asset vs. International Zeolite Corp | First Asset vs. European Residential Real | First Asset vs. Financial 15 Split | First Asset vs. Rubicon Organics |
| Ninepoint Energy vs. First Asset Energy | Ninepoint Energy vs. First Asset Tech | Ninepoint Energy vs. Harvest Equal Weight | Ninepoint Energy vs. CI Canada Lifeco |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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