Correlation Between First Trust and XWEB
Can any of the company-specific risk be diversified away by investing in both First Trust and XWEB 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 XWEB 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 XWEB, you can compare the effects of market volatilities on First Trust and XWEB 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 XWEB. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and XWEB.
Diversification Opportunities for First Trust and XWEB
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and XWEB is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding First Trust NASDAQ and XWEB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XWEB 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 XWEB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XWEB has no effect on the direction of First Trust i.e., First Trust and XWEB go up and down completely randomly.
Pair Corralation between First Trust and XWEB
If you would invest 4,948 in First Trust NASDAQ on August 26, 2024 and sell it today you would earn a total of 1,413 from holding First Trust NASDAQ or generate 28.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.4% |
| Values | Daily Returns |
First Trust NASDAQ vs. XWEB
Performance |
| Timeline |
| First Trust NASDAQ |
| XWEB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Trust and XWEB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and XWEB
The main advantage of trading using opposite First Trust and XWEB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, XWEB 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 XWEB will offset losses from the drop in XWEB'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 |
| XWEB vs. SPDR FactSet Innovative | XWEB vs. SPDR SP Software | XWEB vs. SPDR Morgan Stanley | XWEB vs. SPDR SP Health |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |