Correlation Between Firsthand Alternative and Us Government
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Us 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 Alternative and Us Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firsthand Alternative Energy and Us Government Securities, you can compare the effects of market volatilities on Firsthand Alternative and Us 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 Alternative with a short position of Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Us Government.
Diversification Opportunities for Firsthand Alternative and Us Government
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Firsthand and UGSDX is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities and Firsthand Alternative 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 Alternative Energy are associated (or correlated) with Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Us Government go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Us Government
Assuming the 90 days horizon Firsthand Alternative Energy is expected to generate 15.96 times more return on investment than Us Government. However, Firsthand Alternative is 15.96 times more volatile than Us Government Securities. It trades about 0.31 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.18 per unit of risk. If you would invest 761.00 in Firsthand Alternative Energy on April 15, 2025 and sell it today you would earn a total of 235.00 from holding Firsthand Alternative Energy or generate 30.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Us Government Securities
Performance |
| Timeline |
| Firsthand Alternative |
| Us Government Securities |
Firsthand Alternative and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Us Government
The main advantage of trading using opposite Firsthand Alternative and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Us 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 Us Government will offset losses from the drop in Us Government's long position.| Firsthand Alternative vs. Guinness Atkinson Alternative | Firsthand Alternative vs. Calvert Global Energy | Firsthand Alternative vs. New Alternatives Fund | Firsthand Alternative vs. Shelton Green Alpha |
| Us Government vs. Morningstar Unconstrained Allocation | Us Government vs. Old Westbury Large | Us Government vs. Transamerica Asset Allocation | Us Government vs. Growth Allocation 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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