Correlation Between Saba Closed and First Trust
Can any of the company-specific risk be diversified away by investing in both Saba Closed 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 Saba Closed and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saba Closed End Funds and First Trust Income, you can compare the effects of market volatilities on Saba Closed 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 Saba Closed with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saba Closed and First Trust.
Diversification Opportunities for Saba Closed and First Trust
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Saba and First is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Saba Closed End Funds and First Trust Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Income and Saba Closed 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 Saba Closed End Funds 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 Income has no effect on the direction of Saba Closed i.e., Saba Closed and First Trust go up and down completely randomly.
Pair Corralation between Saba Closed and First Trust
Given the investment horizon of 90 days Saba Closed is expected to generate 1.46 times less return on investment than First Trust. In addition to that, Saba Closed is 1.65 times more volatile than First Trust Income. It trades about 0.1 of its total potential returns per unit of risk. First Trust Income is currently generating about 0.24 per unit of volatility. If you would invest 2,181 in First Trust Income on August 30, 2024 and sell it today you would earn a total of 57.00 from holding First Trust Income or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saba Closed End Funds vs. First Trust Income
Performance |
| Timeline |
| Saba Closed End |
| First Trust Income |
Saba Closed and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saba Closed and First Trust
The main advantage of trading using opposite Saba Closed and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saba Closed 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.| Saba Closed vs. First Trust Income | Saba Closed vs. Invesco CEF Income | Saba Closed vs. GraniteShares HIPS High | Saba Closed vs. Amplify High Income |
| First Trust vs. First Trust BuyWrite | First Trust vs. First Trust Emerging | First Trust vs. First Trust SSI | First Trust vs. First Trust Alternative |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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