Correlation Between PFSweb and First Advantage

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

By analyzing existing cross correlation between PFSweb Inc and First Advantage Corp, you can compare the effects of market volatilities on PFSweb and First Advantage 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 PFSweb with a short position of First Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of PFSweb and First Advantage.

Diversification Opportunities for PFSweb and First Advantage

0.0

Correlation Coefficient

PFSweb  First Advantage

Pay attention - limited upside

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

Pair Corralation between PFSweb and First Advantage

If you would invest  1,766  in First Advantage Corp on March 10, 2025 and sell it today you would earn a total of  51.00  from holding First Advantage Corp or generate 2.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PFSweb Inc  vs.  First Advantage Corp

PFSweb Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days PFSweb Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, PFSweb is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

First Advantage Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Advantage Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, First Advantage sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PFSweb and First Advantage

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

The idea behind PFSweb Inc and First Advantage Corp 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.