Correlation Between Apptech Corp and Firsthand Alternative

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Can any of the company-specific risk be diversified away by investing in both Apptech Corp and Firsthand Alternative 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 Apptech Corp and Firsthand Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apptech Corp and Firsthand Alternative Energy, you can compare the effects of market volatilities on Apptech Corp and Firsthand Alternative 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 Apptech Corp with a short position of Firsthand Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apptech Corp and Firsthand Alternative.

Diversification Opportunities for Apptech Corp and Firsthand Alternative

-0.69
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Apptech and Firsthand is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Apptech Corp and Firsthand Alternative Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firsthand Alternative and Apptech Corp 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 Apptech Corp are associated (or correlated) with Firsthand Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firsthand Alternative has no effect on the direction of Apptech Corp i.e., Apptech Corp and Firsthand Alternative go up and down completely randomly.

Pair Corralation between Apptech Corp and Firsthand Alternative

Given the investment horizon of 90 days Apptech Corp is expected to generate 24.17 times more return on investment than Firsthand Alternative. However, Apptech Corp is 24.17 times more volatile than Firsthand Alternative Energy. It trades about 0.14 of its potential returns per unit of risk. Firsthand Alternative Energy is currently generating about 0.36 per unit of risk. If you would invest  28.00  in Apptech Corp on May 1, 2025 and sell it today you would earn a total of  2.00  from holding Apptech Corp or generate 7.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy40.32%
ValuesDaily Returns

Apptech Corp  vs.  Firsthand Alternative Energy

 Performance 
       Timeline  
Apptech Corp 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Over the last 90 days Apptech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal fundamental indicators, Apptech Corp showed solid returns over the last few months and may actually be approaching a breakup point.
Firsthand Alternative 

Risk-Adjusted Performance

Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Firsthand Alternative Energy are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Firsthand Alternative showed solid returns over the last few months and may actually be approaching a breakup point.

Apptech Corp and Firsthand Alternative Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apptech Corp and Firsthand Alternative

The main advantage of trading using opposite Apptech Corp and Firsthand Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apptech Corp position performs unexpectedly, Firsthand Alternative 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 Firsthand Alternative will offset losses from the drop in Firsthand Alternative's long position.
The idea behind Apptech Corp and Firsthand Alternative Energy 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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