Correlation Between First Trust and First Trust
Can any of the company-specific risk be diversified away by investing in both First Trust 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 First Trust and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Cboe and First Trust Exchange Traded, you can compare the effects of market volatilities on First Trust 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 First Trust with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and First Trust.
Diversification Opportunities for First Trust and First Trust
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and First is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Cboe and First Trust Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Exchange and First Trust 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 Trust Cboe 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 Exchange has no effect on the direction of First Trust i.e., First Trust and First Trust go up and down completely randomly.
Pair Corralation between First Trust and First Trust
Given the investment horizon of 90 days First Trust Cboe is expected to generate 1.24 times more return on investment than First Trust. However, First Trust is 1.24 times more volatile than First Trust Exchange Traded. It trades about 0.18 of its potential returns per unit of risk. First Trust Exchange Traded is currently generating about 0.17 per unit of risk. If you would invest 2,565 in First Trust Cboe on August 24, 2024 and sell it today you would earn a total of 478.00 from holding First Trust Cboe or generate 18.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Cboe vs. First Trust Exchange Traded
Performance |
| Timeline |
| First Trust Cboe |
| First Trust Exchange |
First Trust and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and First Trust
The main advantage of trading using opposite First Trust and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust 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.| First Trust vs. FT Cboe Vest | First Trust vs. First Trust Exchange Traded | First Trust vs. FT Cboe Vest | First Trust vs. FT Cboe Vest |
| First Trust vs. First Trust Cboe | First Trust vs. FT Cboe Vest | First Trust vs. Innovator SP 500 | First Trust vs. Innovator SP 500 |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |