Correlation Between Firsthand Technology and OFS Credit

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

Diversification Opportunities for Firsthand Technology and OFS Credit

-0.74

Correlation Coefficient

Firsthand Technology  OFS Credit

Pay attention - limited upside

The 3 months correlation between Firsthand and OFS is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Value and OFS Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFS Credit 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 OFS Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFS Credit has no effect on the direction of Firsthand Technology i.e., Firsthand Technology and OFS Credit go up and down completely randomly.

Pair Corralation between Firsthand Technology and OFS Credit

If you would invest  2,353  in OFS Credit on October 7, 2024 and sell it today you would earn a total of  16.00  from holding OFS Credit or generate 0.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	2.44%
Values	Daily Returns

Firsthand Technology Value  vs.  OFS Credit

Firsthand Technology

Risk-Adjusted Performance

0 of 100

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.

OFS Credit

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in OFS Credit are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, OFS Credit 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 OFS Credit

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

The idea behind Firsthand Technology Value and OFS Credit 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.