Correlation Between First Trust and Mackenzie Floating
Can any of the company-specific risk be diversified away by investing in both First Trust and Mackenzie Floating 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 Mackenzie Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Global and Mackenzie Floating Rate, you can compare the effects of market volatilities on First Trust and Mackenzie Floating 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 Mackenzie Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Mackenzie Floating.
Diversification Opportunities for First Trust and Mackenzie Floating
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Mackenzie is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Global and Mackenzie Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Floating Rate 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 Global are associated (or correlated) with Mackenzie Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Floating Rate has no effect on the direction of First Trust i.e., First Trust and Mackenzie Floating go up and down completely randomly.
Pair Corralation between First Trust and Mackenzie Floating
Assuming the 90 days trading horizon First Trust is expected to generate 1.49 times less return on investment than Mackenzie Floating. In addition to that, First Trust is 2.95 times more volatile than Mackenzie Floating Rate. It trades about 0.12 of its total potential returns per unit of risk. Mackenzie Floating Rate is currently generating about 0.53 per unit of volatility. If you would invest 1,698 in Mackenzie Floating Rate on August 29, 2024 and sell it today you would earn a total of 25.00 from holding Mackenzie Floating Rate or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Global vs. Mackenzie Floating Rate
Performance |
| Timeline |
| First Trust Global |
| Mackenzie Floating Rate |
First Trust and Mackenzie Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Mackenzie Floating
The main advantage of trading using opposite First Trust and Mackenzie Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Mackenzie Floating 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 Mackenzie Floating will offset losses from the drop in Mackenzie Floating's long position.| First Trust vs. First Trust Senior | First Trust vs. First Trust Value | First Trust vs. FT AlphaDEX Industrials | First Trust vs. Global X Active |
| Mackenzie Floating vs. First Trust Global | Mackenzie Floating vs. FT AlphaDEX Industrials | Mackenzie Floating vs. First Trust Value | Mackenzie Floating vs. Global X Active |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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