Correlation Between First Advantage and CSX
Can any of the company-specific risk be diversified away by investing in both First Advantage and CSX 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 Advantage and CSX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Advantage Corp and CSX Corporation, you can compare the effects of market volatilities on First Advantage and CSX 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 Advantage with a short position of CSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Advantage and CSX.
Diversification Opportunities for First Advantage and CSX
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and CSX is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding First Advantage Corp and CSX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSX Corporation and First Advantage 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 Advantage Corp are associated (or correlated) with CSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSX Corporation has no effect on the direction of First Advantage i.e., First Advantage and CSX go up and down completely randomly.
Pair Corralation between First Advantage and CSX
Allowing for the 90-day total investment horizon First Advantage Corp is expected to generate 2.4 times more return on investment than CSX. However, First Advantage is 2.4 times more volatile than CSX Corporation. It trades about 0.15 of its potential returns per unit of risk. CSX Corporation is currently generating about 0.31 per unit of risk. If you would invest 1,411 in First Advantage Corp on April 28, 2025 and sell it today you would earn a total of 429.00 from holding First Advantage Corp or generate 30.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
First Advantage Corp vs. CSX Corp.
Performance |
Timeline |
First Advantage Corp |
CSX Corporation |
First Advantage and CSX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Advantage and CSX
The main advantage of trading using opposite First Advantage and CSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Advantage position performs unexpectedly, CSX 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 CSX will offset losses from the drop in CSX's long position.First Advantage vs. Network 1 Technologies | First Advantage vs. Civeo Corp | First Advantage vs. BrightView Holdings | First Advantage vs. Maximus |
CSX vs. Canadian National Railway | CSX vs. Canadian Pacific Railway | CSX vs. Deere Company | CSX vs. Norfolk Southern |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |