Correlation Between Xometry and First Advantage

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

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

Diversification Opportunities for Xometry and First Advantage

0.74

Correlation Coefficient

Xometry  First Advantage

Poor diversification

The 3 months correlation between Xometry and First is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Xometry 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 Xometry 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 Xometry 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 Xometry i.e., Xometry and First Advantage go up and down completely randomly.

Pair Corralation between Xometry and First Advantage

Given the investment horizon of 90 days Xometry is expected to generate 1.14 times less return on investment than First Advantage. In addition to that, Xometry is 1.15 times more volatile than First Advantage Corp. It trades about 0.1 of its total potential returns per unit of risk. First Advantage Corp is currently generating about 0.12 per unit of volatility. If you would invest  1,446  in First Advantage Corp on May 1, 2025 and sell it today you would earn a total of  355.00  from holding First Advantage Corp or generate 24.55% return on investment over 90 days.

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

Xometry  vs.  First Advantage Corp

Xometry

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xometry are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Xometry reported solid returns over the last few months and may actually be approaching a breakup point.

First Advantage Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Advantage Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, First Advantage sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xometry and First Advantage

The main advantage of trading using opposite Xometry and First Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xometry 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 Xometry 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.