Correlation Between First Advantage and YXTCOM GROUP

Can any of the company-specific risk be diversified away by investing in both First Advantage and YXTCOM GROUP 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 YXTCOM GROUP 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 YXTCOM GROUP HOLDING, you can compare the effects of market volatilities on First Advantage and YXTCOM GROUP 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 YXTCOM GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Advantage and YXTCOM GROUP.

Diversification Opportunities for First Advantage and YXTCOM GROUP

0.44

Correlation Coefficient

First Advantage  YXTCOM GROUP

Very weak diversification

The 3 months correlation between First and YXTCOM is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding First Advantage Corp and YXTCOM GROUP HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YXTCOM GROUP HOLDING 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 YXTCOM GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YXTCOM GROUP HOLDING has no effect on the direction of First Advantage i.e., First Advantage and YXTCOM GROUP go up and down completely randomly.

Pair Corralation between First Advantage and YXTCOM GROUP

Allowing for the 90-day total investment horizon First Advantage Corp is expected to under-perform the YXTCOM GROUP. But the stock apears to be less risky and, when comparing its historical volatility, First Advantage Corp is 5.77 times less risky than YXTCOM GROUP. The stock trades about -0.4 of its potential returns per unit of risk. The YXTCOM GROUP HOLDING is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  205.00  in YXTCOM GROUP HOLDING on October 17, 2024 and sell it today you would lose (7.00) from holding YXTCOM GROUP HOLDING or give up 3.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

First Advantage Corp  vs.  YXTCOM GROUP HOLDING

First Advantage Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Advantage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

YXTCOM GROUP HOLDING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YXTCOM GROUP HOLDING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, YXTCOM GROUP is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with First Advantage and YXTCOM GROUP

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

The idea behind First Advantage Corp and YXTCOM GROUP HOLDING 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.