Correlation Between Great Elm and Firsthand Technology

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

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

Diversification Opportunities for Great Elm and Firsthand Technology

0.0

Correlation Coefficient

Great Elm  Firsthand Technology

Pay attention - limited upside

The 3 months correlation between Great and Firsthand is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Great Elm Capital and Firsthand Technology Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firsthand Technology and Great Elm 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 Great Elm Capital 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 Great Elm i.e., Great Elm and Firsthand Technology go up and down completely randomly.

Pair Corralation between Great Elm and Firsthand Technology

If you would invest  2,438  in Great Elm Capital on December 30, 2024 and sell it today you would earn a total of  161.00  from holding Great Elm Capital or generate 6.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Great Elm Capital  vs.  Firsthand Technology Value

Great Elm Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Great Elm Capital are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Great Elm may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Firsthand Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Firsthand Technology Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, Firsthand Technology is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Great Elm and Firsthand Technology

The main advantage of trading using opposite Great Elm and Firsthand Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Elm 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 Great Elm Capital and Firsthand Technology Value 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.