Correlation Between Firsthand Technology and Bond Fund

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

By analyzing existing cross correlation between Firsthand Technology Opportunities and Bond Fund Class, you can compare the effects of market volatilities on Firsthand Technology and Bond Fund 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 Bond Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Technology and Bond Fund.

Diversification Opportunities for Firsthand Technology and Bond Fund

-0.03

Correlation Coefficient

Firsthand Technology  Bond Fund

Good diversification

The 3 months correlation between Firsthand and Bond is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Opportuni and Bond Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bond Fund Class 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 Opportunities are associated (or correlated) with Bond Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bond Fund Class has no effect on the direction of Firsthand Technology i.e., Firsthand Technology and Bond Fund go up and down completely randomly.

Pair Corralation between Firsthand Technology and Bond Fund

Assuming the 90 days horizon Firsthand Technology Opportunities is expected to under-perform the Bond Fund. In addition to that, Firsthand Technology is 7.39 times more volatile than Bond Fund Class. It trades about -0.01 of its total potential returns per unit of risk. Bond Fund Class is currently generating about 0.17 per unit of volatility. If you would invest  828.00  in Bond Fund Class on December 21, 2024 and sell it today you would earn a total of  25.00  from holding Bond Fund Class or generate 3.02% return on investment over 90 days.

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

Firsthand Technology Opportuni  vs.  Bond Fund Class

Firsthand Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Firsthand Technology Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Firsthand Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bond Fund Class

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bond Fund Class are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Bond Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Firsthand Technology and Bond Fund

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

The idea behind Firsthand Technology Opportunities and Bond Fund Class 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.