Correlation Between Firsthand Technology and Global Multi

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

Diversification Opportunities for Firsthand Technology and Global Multi

0.66

Correlation Coefficient

Firsthand Technology  Global Multi

Poor diversification

The 3 months correlation between Firsthand and Global is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Opportuni and Global Multi Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Multi Strategy 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 Global Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Multi Strategy has no effect on the direction of Firsthand Technology i.e., Firsthand Technology and Global Multi go up and down completely randomly.

Pair Corralation between Firsthand Technology and Global Multi

Assuming the 90 days horizon Firsthand Technology is expected to generate 273.0 times less return on investment than Global Multi. In addition to that, Firsthand Technology is 10.14 times more volatile than Global Multi Strategy Fund. It trades about 0.0 of its total potential returns per unit of risk. Global Multi Strategy Fund is currently generating about 0.32 per unit of volatility. If you would invest  1,116  in Global Multi Strategy Fund on October 24, 2024 and sell it today you would earn a total of  11.00  from holding Global Multi Strategy Fund or generate 0.99% return on investment over 90 days.

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

Firsthand Technology Opportuni  vs.  Global Multi Strategy Fund

Firsthand Technology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Firsthand Technology Opportunities are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Firsthand Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Global Multi Strategy

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Multi Strategy Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Global Multi 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 Global Multi

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

The idea behind Firsthand Technology Opportunities and Global Multi Strategy Fund 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.