Correlation Between Optimum Large and First Investors

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

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

Diversification Opportunities for Optimum Large and First Investors

0.94

Correlation Coefficient

Optimum Large  First Investors

Almost no diversification

The 3 months correlation between Optimum and First is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Optimum Large Cap and First Investors Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Investors Tax and Optimum 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 Optimum Large Cap are associated (or correlated) with First Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Investors Tax has no effect on the direction of Optimum Large i.e., Optimum Large and First Investors go up and down completely randomly.

Pair Corralation between Optimum Large and First Investors

Assuming the 90 days horizon Optimum Large Cap is expected to generate 3.69 times more return on investment than First Investors. However, Optimum Large is 3.69 times more volatile than First Investors Tax. It trades about 0.14 of its potential returns per unit of risk. First Investors Tax is currently generating about 0.43 per unit of risk. If you would invest  2,583  in Optimum Large Cap on July 18, 2025 and sell it today you would earn a total of  203.00  from holding Optimum Large Cap or generate 7.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Optimum Large Cap  vs.  First Investors Tax

Optimum Large Cap

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Optimum Large Cap are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Optimum Large may actually be approaching a critical reversion point that can send shares even higher in November 2025.

First Investors Tax

Risk-Adjusted Performance

High

Compared to the overall equity markets, risk-adjusted returns on investments in First Investors Tax are ranked lower than 33 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, First Investors may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Optimum Large and First Investors

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

The idea behind Optimum Large Cap and First Investors Tax 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.