Correlation Between First Trust and ProShares Metaverse
Can any of the company-specific risk be diversified away by investing in both First Trust and ProShares Metaverse 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 ProShares Metaverse 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 ProShares Metaverse ETF, you can compare the effects of market volatilities on First Trust and ProShares Metaverse 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 ProShares Metaverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and ProShares Metaverse.
Diversification Opportunities for First Trust and ProShares Metaverse
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and ProShares is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding First Trust NASDAQ and ProShares Metaverse ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Metaverse ETF 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 ProShares Metaverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Metaverse ETF has no effect on the direction of First Trust i.e., First Trust and ProShares Metaverse go up and down completely randomly.
Pair Corralation between First Trust and ProShares Metaverse
Given the investment horizon of 90 days First Trust is expected to generate 1.61 times less return on investment than ProShares Metaverse. But when comparing it to its historical volatility, First Trust NASDAQ is 1.74 times less risky than ProShares Metaverse. It trades about 0.21 of its potential returns per unit of risk. ProShares Metaverse ETF is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 4,320 in ProShares Metaverse ETF on November 18, 2024 and sell it today you would earn a total of 1,183 from holding ProShares Metaverse ETF or generate 27.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust NASDAQ vs. ProShares Metaverse ETF
Performance |
| Timeline |
| First Trust NASDAQ |
| ProShares Metaverse ETF |
First Trust and ProShares Metaverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and ProShares Metaverse
The main advantage of trading using opposite First Trust and ProShares Metaverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, ProShares Metaverse 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 ProShares Metaverse will offset losses from the drop in ProShares Metaverse'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 |
| ProShares Metaverse vs. Roundhill Ball Metaverse | ProShares Metaverse vs. Deltagen | ProShares Metaverse vs. Fidelity Metaverse ETF |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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