Correlation Between Bruce Fund and Firsthand Technology

Can any of the company-specific risk be diversified away by investing in both Bruce Fund and Firsthand Technology 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 Bruce Fund and Firsthand Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bruce Fund Bruce and Firsthand Technology Opportunities, you can compare the effects of market volatilities on Bruce Fund and Firsthand Technology 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 Bruce Fund with a short position of Firsthand Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bruce Fund and Firsthand Technology.

Diversification Opportunities for Bruce Fund and Firsthand Technology

-0.35

Correlation Coefficient

Bruce Fund  Firsthand Technology

Very good diversification

The 3 months correlation between Bruce and Firsthand is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bruce Fund Bruce and Firsthand Technology Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firsthand Technology and Bruce Fund 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 Bruce Fund Bruce are associated (or correlated) with Firsthand Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firsthand Technology has no effect on the direction of Bruce Fund i.e., Bruce Fund and Firsthand Technology go up and down completely randomly.

Pair Corralation between Bruce Fund and Firsthand Technology

Assuming the 90 days horizon Bruce Fund Bruce is expected to under-perform the Firsthand Technology. But the mutual fund apears to be less risky and, when comparing its historical volatility, Bruce Fund Bruce is 3.02 times less risky than Firsthand Technology. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Firsthand Technology Opportunities is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  350.00  in Firsthand Technology Opportunities on September 14, 2024 and sell it today you would earn a total of  55.00  from holding Firsthand Technology Opportunities or generate 15.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Bruce Fund Bruce  vs.  Firsthand Technology Opportuni

Bruce Fund Bruce

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bruce Fund Bruce has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Bruce Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Firsthand Technology

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Firsthand Technology Opportunities are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Firsthand Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bruce Fund and Firsthand Technology

The main advantage of trading using opposite Bruce Fund and Firsthand Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bruce Fund position performs unexpectedly, Firsthand Technology 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 Firsthand Technology will offset losses from the drop in Firsthand Technology's long position.

The idea behind Bruce Fund Bruce and Firsthand Technology Opportunities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.