Correlation Between First Trust and SPDR FTSE
Can any of the company-specific risk be diversified away by investing in both First Trust and SPDR FTSE 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 SPDR FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust SkyBridge and SPDR FTSE International, you can compare the effects of market volatilities on First Trust and SPDR FTSE 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 SPDR FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and SPDR FTSE.
Diversification Opportunities for First Trust and SPDR FTSE
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and SPDR is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding First Trust SkyBridge and SPDR FTSE International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR FTSE International 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 SkyBridge are associated (or correlated) with SPDR FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR FTSE International has no effect on the direction of First Trust i.e., First Trust and SPDR FTSE go up and down completely randomly.
Pair Corralation between First Trust and SPDR FTSE
Given the investment horizon of 90 days First Trust SkyBridge is expected to generate 7.07 times more return on investment than SPDR FTSE. However, First Trust is 7.07 times more volatile than SPDR FTSE International. It trades about 0.1 of its potential returns per unit of risk. SPDR FTSE International is currently generating about 0.0 per unit of risk. If you would invest 374.00 in First Trust SkyBridge on September 3, 2024 and sell it today you would earn a total of 1,696 from holding First Trust SkyBridge or generate 453.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust SkyBridge vs. SPDR FTSE International
Performance |
| Timeline |
| First Trust SkyBridge |
| SPDR FTSE International |
First Trust and SPDR FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and SPDR FTSE
The main advantage of trading using opposite First Trust and SPDR FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, SPDR FTSE 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 SPDR FTSE will offset losses from the drop in SPDR FTSE's long position.| First Trust vs. VanEck Digital Transformation | First Trust vs. Bitwise Crypto Industry | First Trust vs. Global X Blockchain | First Trust vs. First Trust Indxx |
| SPDR FTSE vs. SPDR Bloomberg Emerging | SPDR FTSE vs. Vanguard Emerging Markets | SPDR FTSE vs. SPDR Bloomberg Barclays | SPDR FTSE vs. VanEck JP Morgan |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |