Correlation Between First Trust and VanEck Video
Can any of the company-specific risk be diversified away by investing in both First Trust and VanEck Video 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 VanEck Video into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust S Network and VanEck Video Gaming, you can compare the effects of market volatilities on First Trust and VanEck Video 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 VanEck Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and VanEck Video.
Diversification Opportunities for First Trust and VanEck Video
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and VanEck is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding First Trust S Network and VanEck Video Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Video Gaming 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 S Network are associated (or correlated) with VanEck Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Video Gaming has no effect on the direction of First Trust i.e., First Trust and VanEck Video go up and down completely randomly.
Pair Corralation between First Trust and VanEck Video
Given the investment horizon of 90 days First Trust is expected to generate 2.03 times less return on investment than VanEck Video. In addition to that, First Trust is 1.08 times more volatile than VanEck Video Gaming. It trades about 0.05 of its total potential returns per unit of risk. VanEck Video Gaming is currently generating about 0.1 per unit of volatility. If you would invest 4,439 in VanEck Video Gaming on August 30, 2024 and sell it today you would earn a total of 3,906 from holding VanEck Video Gaming or generate 87.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust S Network vs. VanEck Video Gaming
Performance |
| Timeline |
| First Trust S |
| VanEck Video Gaming |
First Trust and VanEck Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and VanEck Video
The main advantage of trading using opposite First Trust and VanEck Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, VanEck Video 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 VanEck Video will offset losses from the drop in VanEck Video's long position.| First Trust vs. KraneShares Electric Vehicles | First Trust vs. First Trust Nasdaq | First Trust vs. VanEck Gaming ETF | First Trust vs. First Trust NASDAQ |
| VanEck Video vs. Roundhill Video Games | VanEck Video vs. Global X Video | VanEck Video vs. Amplify ETF Trust | VanEck Video vs. Global X Cloud |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |