Correlation Between Firsthand Technology and Great Elm

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

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

Diversification Opportunities for Firsthand Technology and Great Elm

0.0

Correlation Coefficient

Firsthand Technology  Great Elm

Pay attention - limited upside

The 3 months correlation between Firsthand and Great is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Value and Great Elm Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Elm Capital and Firsthand Technology 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 Technology Value are associated (or correlated) with Great Elm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Elm Capital has no effect on the direction of Firsthand Technology i.e., Firsthand Technology and Great Elm go up and down completely randomly.

Pair Corralation between Firsthand Technology and Great Elm

If you would invest  2,444  in Great Elm Capital on December 4, 2024 and sell it today you would earn a total of  88.00  from holding Great Elm Capital or generate 3.6% return on investment over 90 days.

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

Firsthand Technology Value  vs.  Great Elm Capital

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.

Great Elm Capital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Great Elm Capital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Great Elm is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Firsthand Technology and Great Elm

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

The idea behind Firsthand Technology Value and Great Elm Capital 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.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.