Correlation Between Southern Empire and First Advantage

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

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

Diversification Opportunities for Southern Empire and First Advantage

-0.57

Correlation Coefficient

Southern Empire  First Advantage

Excellent diversification

The 3 months correlation between Southern and First is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Southern Empire Resources 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 Southern Empire 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 Southern Empire Resources 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 Southern Empire i.e., Southern Empire and First Advantage go up and down completely randomly.

Pair Corralation between Southern Empire and First Advantage

Assuming the 90 days horizon Southern Empire Resources is expected to generate 3.28 times more return on investment than First Advantage. However, Southern Empire is 3.28 times more volatile than First Advantage Corp. It trades about 0.08 of its potential returns per unit of risk. First Advantage Corp is currently generating about -0.08 per unit of risk. If you would invest  3.00  in Southern Empire Resources on September 12, 2025 and sell it today you would earn a total of  0.90  from holding Southern Empire Resources or generate 30.0% return on investment over 90 days.

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

Southern Empire Resources  vs.  First Advantage Corp

Southern Empire Resources

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Southern Empire Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Southern Empire reported solid returns over the last few months and may actually be approaching a breakup point.

First Advantage Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days First Advantage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Southern Empire and First Advantage

The main advantage of trading using opposite Southern Empire and First Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Empire 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 Southern Empire Resources 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.