Correlation Between First Trust and XBTF
Can any of the company-specific risk be diversified away by investing in both First Trust and XBTF 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 XBTF 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 XBTF, you can compare the effects of market volatilities on First Trust and XBTF 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 XBTF. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and XBTF.
Diversification Opportunities for First Trust and XBTF
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and XBTF is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding First Trust SkyBridge and XBTF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XBTF 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 XBTF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XBTF has no effect on the direction of First Trust i.e., First Trust and XBTF go up and down completely randomly.
Pair Corralation between First Trust and XBTF
If you would invest 1,212 in First Trust SkyBridge on August 26, 2024 and sell it today you would earn a total of 778.00 from holding First Trust SkyBridge or generate 64.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 2.27% |
| Values | Daily Returns |
First Trust SkyBridge vs. XBTF
Performance |
| Timeline |
| First Trust SkyBridge |
| XBTF |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Trust and XBTF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and XBTF
The main advantage of trading using opposite First Trust and XBTF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, XBTF 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 XBTF will offset losses from the drop in XBTF'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 |
| XBTF vs. Grayscale Bitcoin Trust | XBTF vs. Siren Nasdaq NexGen | XBTF vs. Grayscale Bitcoin Mini | XBTF vs. First Trust SkyBridge |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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