Correlation Between First Advantage and System1
Can any of the company-specific risk be diversified away by investing in both First Advantage and System1 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 Advantage and System1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Advantage Corp and System1, you can compare the effects of market volatilities on First Advantage and System1 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 Advantage with a short position of System1. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Advantage and System1.
Diversification Opportunities for First Advantage and System1
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and System1 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding First Advantage Corp and System1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on System1 and First Advantage 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 Advantage Corp are associated (or correlated) with System1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of System1 has no effect on the direction of First Advantage i.e., First Advantage and System1 go up and down completely randomly.
Pair Corralation between First Advantage and System1
Allowing for the 90-day total investment horizon First Advantage Corp is expected to under-perform the System1. But the stock apears to be less risky and, when comparing its historical volatility, First Advantage Corp is 4.09 times less risky than System1. The stock trades about -0.02 of its potential returns per unit of risk. The System1 is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 363.00 in System1 on May 31, 2025 and sell it today you would earn a total of 349.00 from holding System1 or generate 96.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Advantage Corp vs. System1
Performance |
| Timeline |
| First Advantage Corp |
| System1 |
First Advantage and System1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Advantage and System1
The main advantage of trading using opposite First Advantage and System1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Advantage position performs unexpectedly, System1 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 System1 will offset losses from the drop in System1's long position.| First Advantage vs. Network 1 Technologies | First Advantage vs. Civeo Corp | First Advantage vs. BrightView Holdings | First Advantage vs. Maximus |
| System1 vs. Lichen China Limited | System1 vs. Unifirst | System1 vs. First Advantage Corp | System1 vs. Inspirato |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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