Correlation Between M Large and First Foundation

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

By analyzing existing cross correlation between M Large Cap and First Foundation Total, you can compare the effects of market volatilities on M Large and First Foundation 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 M Large with a short position of First Foundation. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Large and First Foundation.

Diversification Opportunities for M Large and First Foundation

0.0

Correlation Coefficient

M Large  First Foundation

Pay attention - limited upside

The 3 months correlation between MTCGX and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding M Large Cap and First Foundation Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Foundation Total and M Large 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 M Large Cap are associated (or correlated) with First Foundation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Foundation Total has no effect on the direction of M Large i.e., M Large and First Foundation go up and down completely randomly.

Pair Corralation between M Large and First Foundation

If you would invest  3,567  in M Large Cap on June 28, 2025 and sell it today you would earn a total of  249.00  from holding M Large Cap or generate 6.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

M Large Cap  vs.  First Foundation Total

M Large Cap

Risk-Adjusted Performance

Good

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

First Foundation Total

Risk-Adjusted Performance

Weakest

Over the last 90 days First Foundation Total has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, First Foundation is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with M Large and First Foundation

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

The idea behind M Large Cap and First Foundation Total 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.