Correlation Between Ivy Asset and First Investors
Can any of the company-specific risk be diversified away by investing in both Ivy Asset and First Investors 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 Ivy Asset and First Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivy Asset Strategy and First Investors Select, you can compare the effects of market volatilities on Ivy Asset and First Investors 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 Ivy Asset with a short position of First Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivy Asset and First Investors.
Diversification Opportunities for Ivy Asset and First Investors
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivy and First is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ivy Asset Strategy and First Investors Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Investors Select and Ivy 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 Ivy Asset Strategy are associated (or correlated) with First Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Investors Select has no effect on the direction of Ivy Asset i.e., Ivy Asset and First Investors go up and down completely randomly.
Pair Corralation between Ivy Asset and First Investors
Assuming the 90 days horizon Ivy Asset Strategy is expected to under-perform the First Investors. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ivy Asset Strategy is 1.8 times less risky than First Investors. The mutual fund trades about -0.04 of its potential returns per unit of risk. The First Investors Select is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,193 in First Investors Select on August 26, 2024 and sell it today you would earn a total of 90.00 from holding First Investors Select or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivy Asset Strategy vs. First Investors Select
Performance |
| Timeline |
| Ivy Asset Strategy |
| First Investors Select |
Ivy Asset and First Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivy Asset and First Investors
The main advantage of trading using opposite Ivy Asset and First Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivy Asset position performs unexpectedly, First Investors 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 First Investors will offset losses from the drop in First Investors' long position.| Ivy Asset vs. Qs Large Cap | Ivy Asset vs. Materials Portfolio Fidelity | Ivy Asset vs. Ab Value Fund | Ivy Asset vs. Balanced Fund Investor |
| First Investors vs. Fidelity Advisor Technology | First Investors vs. Firsthand Technology Opportunities | First Investors vs. Pgim Jennison Technology | First Investors vs. Science Technology 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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