Correlation Between First Investors and Altegris Futures
Can any of the company-specific risk be diversified away by investing in both First Investors and Altegris Futures 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 Investors and Altegris Futures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Investors Opportunity and Altegris Futures Evolution, you can compare the effects of market volatilities on First Investors and Altegris Futures 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 Investors with a short position of Altegris Futures. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Investors and Altegris Futures.
Diversification Opportunities for First Investors and Altegris Futures
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between First and Altegris is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding First Investors Opportunity and Altegris Futures Evolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altegris Futures Evo and First Investors 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 Investors Opportunity are associated (or correlated) with Altegris Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altegris Futures Evo has no effect on the direction of First Investors i.e., First Investors and Altegris Futures go up and down completely randomly.
Pair Corralation between First Investors and Altegris Futures
Assuming the 90 days horizon First Investors Opportunity is expected to under-perform the Altegris Futures. In addition to that, First Investors is 3.21 times more volatile than Altegris Futures Evolution. It trades about -0.21 of its total potential returns per unit of risk. Altegris Futures Evolution is currently generating about -0.06 per unit of volatility. If you would invest 661.00 in Altegris Futures Evolution on December 5, 2024 and sell it today you would lose (12.00) from holding Altegris Futures Evolution or give up 1.82% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.33% |
Values | Daily Returns |
First Investors Opportunity vs. Altegris Futures Evolution
Performance |
Timeline |
First Investors Oppo |
Altegris Futures Evo |
First Investors and Altegris Futures Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Investors and Altegris Futures
The main advantage of trading using opposite First Investors and Altegris Futures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Investors position performs unexpectedly, Altegris Futures 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 Altegris Futures will offset losses from the drop in Altegris Futures' long position.First Investors vs. Alpine High Yield | First Investors vs. Aqr Alternative Risk | First Investors vs. Gmo High Yield | First Investors vs. Aqr Risk Parity |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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