Correlation Between First Investors and Ivy Small

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

By analyzing existing cross correlation between First Investors Growth and Ivy Small Cap, you can compare the effects of market volatilities on First Investors and Ivy Small 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 Ivy Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Investors and Ivy Small.

Diversification Opportunities for First Investors and Ivy Small

0.95

Correlation Coefficient

First Investors  Ivy Small

Almost no diversification

The 3 months correlation between First and Ivy is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding First Investors Growth and Ivy Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Small Cap 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 Growth are associated (or correlated) with Ivy Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Small Cap has no effect on the direction of First Investors i.e., First Investors and Ivy Small go up and down completely randomly.

Pair Corralation between First Investors and Ivy Small

Assuming the 90 days horizon First Investors is expected to generate 1.18 times less return on investment than Ivy Small. But when comparing it to its historical volatility, First Investors Growth is 1.7 times less risky than Ivy Small. It trades about 0.15 of its potential returns per unit of risk. Ivy Small Cap is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,291  in Ivy Small Cap on July 26, 2025 and sell it today you would earn a total of  93.00  from holding Ivy Small Cap or generate 7.2% 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 Growth  vs.  Ivy Small Cap

First Investors Growth

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in First Investors Growth are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, First Investors is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ivy Small Cap

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Ivy Small Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ivy Small may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with First Investors and Ivy Small

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

The idea behind First Investors Growth and Ivy Small Cap 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..