Correlation Between Axonic Strategic and First Trust
Can any of the company-specific risk be diversified away by investing in both Axonic Strategic and First Trust 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 Axonic Strategic and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axonic Strategic Income and First Trust High, you can compare the effects of market volatilities on Axonic Strategic and First Trust 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 Axonic Strategic with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axonic Strategic and First Trust.
Diversification Opportunities for Axonic Strategic and First Trust
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Axonic and First is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Axonic Strategic Income and First Trust High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust High and Axonic Strategic 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 Axonic Strategic Income are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust High has no effect on the direction of Axonic Strategic i.e., Axonic Strategic and First Trust go up and down completely randomly.
Pair Corralation between Axonic Strategic and First Trust
Assuming the 90 days horizon Axonic Strategic Income is not expected to generate positive returns. However, Axonic Strategic Income is 2.93 times less risky than First Trust. It waists most of its returns potential to compensate for thr risk taken. First Trust is generating about 0.14 per unit of risk. If you would invest 4,368 in First Trust High on November 2, 2024 and sell it today you would earn a total of 33.78 from holding First Trust High or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Axonic Strategic Income vs. First Trust High
Performance |
| Timeline |
| Axonic Strategic Income |
| First Trust High |
Axonic Strategic and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axonic Strategic and First Trust
The main advantage of trading using opposite Axonic Strategic and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axonic Strategic position performs unexpectedly, First Trust 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 Trust will offset losses from the drop in First Trust's long position.| Axonic Strategic vs. Axonic Strategic Income | Axonic Strategic vs. FT Vest Equity | Axonic Strategic vs. Zillow Group Class | Axonic Strategic vs. Northern Lights |
| First Trust vs. Axonic Strategic Income | First Trust vs. Axonic Strategic Income | First Trust vs. ALPSSmith Credit Opportunities | First Trust vs. ALPSSmith Credit Opportunities |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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