Correlation Between Cboe UK and FIRST TRUST
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By analyzing existing cross correlation between Cboe UK Consumer and FIRST TRUST GLOBAL, you can compare the effects of market volatilities on Cboe UK 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 Cboe UK with a short position of FIRST TRUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe UK and FIRST TRUST.
Diversification Opportunities for Cboe UK and FIRST TRUST
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cboe and FIRST is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Cboe UK Consumer and FIRST TRUST GLOBAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST TRUST GLOBAL and Cboe UK 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 Cboe UK Consumer 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 GLOBAL has no effect on the direction of Cboe UK i.e., Cboe UK and FIRST TRUST go up and down completely randomly.
Pair Corralation between Cboe UK and FIRST TRUST
Assuming the 90 days trading horizon Cboe UK Consumer is expected to under-perform the FIRST TRUST. In addition to that, Cboe UK is 2.73 times more volatile than FIRST TRUST GLOBAL. It trades about -0.28 of its total potential returns per unit of risk. FIRST TRUST GLOBAL is currently generating about -0.56 per unit of volatility. If you would invest 253,575 in FIRST TRUST GLOBAL on December 8, 2024 and sell it today you would lose (16,875) from holding FIRST TRUST GLOBAL or give up 6.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cboe UK Consumer vs. FIRST TRUST GLOBAL
Performance |
| Timeline |
Cboe UK and FIRST TRUST Volatility Contrast
Predicted Return Density |
| Returns |
Cboe UK Consumer
Pair trading matchups for Cboe UK
FIRST TRUST GLOBAL
Pair trading matchups for FIRST TRUST
Pair Trading with Cboe UK and FIRST TRUST
The main advantage of trading using opposite Cboe UK and FIRST TRUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe UK 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.| Cboe UK vs. Universal Health Services | Cboe UK vs. Jade Road Investments | Cboe UK vs. Naturhouse Health SA | Cboe UK vs. Lindsell Train Investment |
| FIRST TRUST vs. Scottish Mortgage Investment | FIRST TRUST vs. VinaCapital Vietnam Opportunity | FIRST TRUST vs. Edinburgh Worldwide Investment | FIRST TRUST vs. Baillie Gifford Growth |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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