Correlation Between Firsthand Alternative and Prudential Floating
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Prudential Floating 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 Prudential Floating 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 Prudential Floating Rate, you can compare the effects of market volatilities on Firsthand Alternative and Prudential Floating 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 Prudential Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Prudential Floating.
Diversification Opportunities for Firsthand Alternative and Prudential Floating
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Firsthand and Prudential is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Prudential Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Floating Rate 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 Prudential Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Floating Rate has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Prudential Floating go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Prudential Floating
Assuming the 90 days horizon Firsthand Alternative is expected to generate 2.87 times less return on investment than Prudential Floating. In addition to that, Firsthand Alternative is 12.56 times more volatile than Prudential Floating Rate. It trades about 0.01 of its total potential returns per unit of risk. Prudential Floating Rate is currently generating about 0.26 per unit of volatility. If you would invest 899.00 in Prudential Floating Rate on September 12, 2024 and sell it today you would earn a total of 17.00 from holding Prudential Floating Rate or generate 1.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Firsthand Alternative Energy vs. Prudential Floating Rate
Performance |
Timeline |
Firsthand Alternative |
Prudential Floating Rate |
Firsthand Alternative and Prudential Floating Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Firsthand Alternative and Prudential Floating
The main advantage of trading using opposite Firsthand Alternative and Prudential Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Prudential Floating 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 Prudential Floating will offset losses from the drop in Prudential Floating'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 |
Prudential Floating vs. Jhancock Diversified Macro | Prudential Floating vs. Wasatch Small Cap | Prudential Floating vs. Huber Capital Diversified | Prudential Floating vs. Davenport Small Cap |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |