Correlation Between Brompton Flaherty and First Trust
Can any of the company-specific risk be diversified away by investing in both Brompton Flaherty 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 Brompton Flaherty and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brompton Flaherty Crumrine and First Trust Canadian, you can compare the effects of market volatilities on Brompton Flaherty 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 Brompton Flaherty with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton Flaherty and First Trust.
Diversification Opportunities for Brompton Flaherty and First Trust
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brompton and First is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Brompton Flaherty Crumrine and First Trust Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Canadian and Brompton Flaherty 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 Brompton Flaherty Crumrine 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 Canadian has no effect on the direction of Brompton Flaherty i.e., Brompton Flaherty and First Trust go up and down completely randomly.
Pair Corralation between Brompton Flaherty and First Trust
Assuming the 90 days trading horizon Brompton Flaherty is expected to generate 5.42 times less return on investment than First Trust. But when comparing it to its historical volatility, Brompton Flaherty Crumrine is 2.09 times less risky than First Trust. It trades about 0.07 of its potential returns per unit of risk. First Trust Canadian is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 6,301 in First Trust Canadian on October 23, 2025 and sell it today you would earn a total of 1,114 from holding First Trust Canadian or generate 17.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Brompton Flaherty Crumrine vs. First Trust Canadian
Performance |
| Timeline |
| Brompton Flaherty |
| First Trust Canadian |
Brompton Flaherty and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brompton Flaherty and First Trust
The main advantage of trading using opposite Brompton Flaherty and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton Flaherty 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.| Brompton Flaherty vs. First Trust Canadian | Brompton Flaherty vs. Global X Canadian | Brompton Flaherty vs. Evolve Cyber Security | Brompton Flaherty vs. iShares MSCI Min |
| First Trust vs. iShares ESG Equity | First Trust vs. iShares MSCI Min | First Trust vs. Invesco RAFI Canadian | First Trust vs. Desjardins RI Developed |
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 Stocks Directory module to find actively traded stocks across global markets.
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