Correlation Between First Investors and Diversified International

Can any of the company-specific risk be diversified away by investing in both First Investors and Diversified International 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 Investors and Diversified International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Investors Select and Diversified International Fund, you can compare the effects of market volatilities on First Investors and Diversified International 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 Investors with a short position of Diversified International. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Investors and Diversified International.

Diversification Opportunities for First Investors and Diversified International

0.9

Correlation Coefficient

First Investors  Diversified International

Almost no diversification

The 3 months correlation between First and Diversified is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding First Investors Select and Diversified International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diversified International and First Investors 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 Investors Select are associated (or correlated) with Diversified International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diversified International has no effect on the direction of First Investors i.e., First Investors and Diversified International go up and down completely randomly.

Pair Corralation between First Investors and Diversified International

Assuming the 90 days horizon First Investors Select is expected to generate 1.09 times more return on investment than Diversified International. However, First Investors is 1.09 times more volatile than Diversified International Fund. It trades about 0.18 of its potential returns per unit of risk. Diversified International Fund is currently generating about 0.15 per unit of risk. If you would invest  1,323  in First Investors Select on May 20, 2025 and sell it today you would earn a total of  113.00  from holding First Investors Select or generate 8.54% return on investment over 90 days.

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

First Investors Select  vs.  Diversified International Fund

First Investors Select

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Investors Select are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, First Investors may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Diversified International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Diversified International Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Diversified International may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with First Investors and Diversified International

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

The idea behind First Investors Select and Diversified International 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.