Correlation Between DXGE and First Trust
Can any of the company-specific risk be diversified away by investing in both DXGE 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 DXGE and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DXGE and First Trust Japan, you can compare the effects of market volatilities on DXGE 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 DXGE with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXGE and First Trust.
Diversification Opportunities for DXGE and First Trust
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DXGE and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DXGE and First Trust Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Japan and DXGE 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 DXGE 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 Japan has no effect on the direction of DXGE i.e., DXGE and First Trust go up and down completely randomly.
Pair Corralation between DXGE and First Trust
If you would invest 5,094 in First Trust Japan on November 22, 2024 and sell it today you would earn a total of 318.00 from holding First Trust Japan or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
DXGE vs. First Trust Japan
Performance |
| Timeline |
| DXGE |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| First Trust Japan |
DXGE and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXGE and First Trust
The main advantage of trading using opposite DXGE and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXGE 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.The idea behind DXGE and First Trust Japan pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| First Trust vs. First Trust United | First Trust vs. First Trust Asia | First Trust vs. First Trust Germany | First Trust vs. First Trust Switzerland |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |