Correlation Between First Trust and VCLO
Can any of the company-specific risk be diversified away by investing in both First Trust and VCLO 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 VCLO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust NASDAQ and VCLO, you can compare the effects of market volatilities on First Trust and VCLO 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 VCLO. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and VCLO.
Diversification Opportunities for First Trust and VCLO
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and VCLO is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding First Trust NASDAQ and VCLO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VCLO 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 NASDAQ are associated (or correlated) with VCLO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VCLO has no effect on the direction of First Trust i.e., First Trust and VCLO go up and down completely randomly.
Pair Corralation between First Trust and VCLO
If you would invest 6,131 in First Trust NASDAQ on August 29, 2024 and sell it today you would earn a total of 169.00 from holding First Trust NASDAQ or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
First Trust NASDAQ vs. VCLO
Performance |
| Timeline |
| First Trust NASDAQ |
| VCLO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Trust and VCLO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and VCLO
The main advantage of trading using opposite First Trust and VCLO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, VCLO 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 VCLO will offset losses from the drop in VCLO's long position.| First Trust vs. Amplify ETF Trust | First Trust vs. Global X Cybersecurity | First Trust vs. iShares Cybersecurity and | First Trust vs. First Trust Cloud |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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