Correlation Between First Asset and Harvest Low

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

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

Diversification Opportunities for First Asset and Harvest Low

0.97

Correlation Coefficient

First Asset  Harvest Low

Almost no diversification

The 3 months correlation between First and Harvest is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding First Asset Morningstar and Harvest Low Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Low Volatility and First Asset 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 Asset Morningstar are associated (or correlated) with Harvest Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Low Volatility has no effect on the direction of First Asset i.e., First Asset and Harvest Low go up and down completely randomly.

Pair Corralation between First Asset and Harvest Low

Assuming the 90 days trading horizon First Asset Morningstar is expected to generate 1.25 times more return on investment than Harvest Low. However, First Asset is 1.25 times more volatile than Harvest Low Volatility. It trades about 0.4 of its potential returns per unit of risk. Harvest Low Volatility is currently generating about 0.24 per unit of risk. If you would invest  3,282  in First Asset Morningstar on April 24, 2025 and sell it today you would earn a total of  404.00  from holding First Asset Morningstar or generate 12.31% return on investment over 90 days.

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

First Asset Morningstar  vs.  Harvest Low Volatility

First Asset Morningstar

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in First Asset Morningstar are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, First Asset may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Harvest Low Volatility

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Harvest Low Volatility are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Harvest Low is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with First Asset and Harvest Low

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

The idea behind First Asset Morningstar and Harvest Low Volatility 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.