Correlation Between First Keystone and Ideanomics
Can any of the company-specific risk be diversified away by investing in both First Keystone and Ideanomics 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 First Keystone and Ideanomics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Keystone Corp and Ideanomics, you can compare the effects of market volatilities on First Keystone and Ideanomics 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 First Keystone with a short position of Ideanomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Keystone and Ideanomics.
Diversification Opportunities for First Keystone and Ideanomics
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Ideanomics is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding First Keystone Corp and Ideanomics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ideanomics and First Keystone 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 First Keystone Corp are associated (or correlated) with Ideanomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ideanomics has no effect on the direction of First Keystone i.e., First Keystone and Ideanomics go up and down completely randomly.
Pair Corralation between First Keystone and Ideanomics
Given the investment horizon of 90 days First Keystone Corp is expected to generate 0.99 times more return on investment than Ideanomics. However, First Keystone Corp is 1.01 times less risky than Ideanomics. It trades about -0.16 of its potential returns per unit of risk. Ideanomics is currently generating about -0.23 per unit of risk. If you would invest 1,530 in First Keystone Corp on January 18, 2024 and sell it today you would lose (230.00) from holding First Keystone Corp or give up 15.03% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
First Keystone Corp vs. Ideanomics
Performance |
Timeline |
First Keystone Corp |
Ideanomics |
First Keystone and Ideanomics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Keystone and Ideanomics
The main advantage of trading using opposite First Keystone and Ideanomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Keystone position performs unexpectedly, Ideanomics 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 Ideanomics will offset losses from the drop in Ideanomics' long position.First Keystone vs. Putnam Short Duration | First Keystone vs. Royce Opportunity Fund | First Keystone vs. C4 TherapeuticsInc | First Keystone vs. LSI Industries |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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