Correlation Between CT Private and FIRST TRUST
Can any of the company-specific risk be diversified away by investing in both CT Private and FIRST TRUST 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 CT Private and FIRST TRUST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CT Private Equity and FIRST TRUST GLOBAL, you can compare the effects of market volatilities on CT Private and FIRST TRUST 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 CT Private with a short position of FIRST TRUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of CT Private and FIRST TRUST.
Diversification Opportunities for CT Private and FIRST TRUST
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CTPE and FIRST is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding CT Private Equity and FIRST TRUST GLOBAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST TRUST GLOBAL and CT Private 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 CT Private Equity are associated (or correlated) with FIRST TRUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST TRUST GLOBAL has no effect on the direction of CT Private i.e., CT Private and FIRST TRUST go up and down completely randomly.
Pair Corralation between CT Private and FIRST TRUST
Assuming the 90 days trading horizon CT Private Equity is expected to generate 3.35 times more return on investment than FIRST TRUST. However, CT Private is 3.35 times more volatile than FIRST TRUST GLOBAL. It trades about 0.18 of its potential returns per unit of risk. FIRST TRUST GLOBAL is currently generating about 0.21 per unit of risk. If you would invest 42,875 in CT Private Equity on November 7, 2024 and sell it today you would earn a total of 7,725 from holding CT Private Equity or generate 18.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CT Private Equity vs. FIRST TRUST GLOBAL
Performance |
| Timeline |
| CT Private Equity |
| FIRST TRUST GLOBAL |
CT Private and FIRST TRUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CT Private and FIRST TRUST
The main advantage of trading using opposite CT Private and FIRST TRUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CT Private position performs unexpectedly, FIRST TRUST 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 FIRST TRUST will offset losses from the drop in FIRST TRUST's long position.| CT Private vs. Aberdeen New India | CT Private vs. Downing Strategic Micro Cap | CT Private vs. Baillie Gifford Growth | CT Private vs. Blackrock Energy and |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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