Correlation Between Edinburgh Worldwide and FIRST TRUST
Can any of the company-specific risk be diversified away by investing in both Edinburgh Worldwide 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 Edinburgh Worldwide and FIRST TRUST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edinburgh Worldwide Investment and FIRST TRUST GLOBAL, you can compare the effects of market volatilities on Edinburgh Worldwide 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 Edinburgh Worldwide with a short position of FIRST TRUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edinburgh Worldwide and FIRST TRUST.
Diversification Opportunities for Edinburgh Worldwide and FIRST TRUST
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Edinburgh and FIRST is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Edinburgh Worldwide Investment 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 Edinburgh Worldwide 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 Edinburgh Worldwide Investment 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 Edinburgh Worldwide i.e., Edinburgh Worldwide and FIRST TRUST go up and down completely randomly.
Pair Corralation between Edinburgh Worldwide and FIRST TRUST
Assuming the 90 days trading horizon Edinburgh Worldwide is expected to generate 415.98 times less return on investment than FIRST TRUST. But when comparing it to its historical volatility, Edinburgh Worldwide Investment is 74.83 times less risky than FIRST TRUST. It trades about 0.02 of its potential returns per unit of risk. FIRST TRUST GLOBAL is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,708 in FIRST TRUST GLOBAL on September 20, 2024 and sell it today you would earn a total of 244,042 from holding FIRST TRUST GLOBAL or generate 9011.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 55.09% |
| Values | Daily Returns |
Edinburgh Worldwide Investment vs. FIRST TRUST GLOBAL
Performance |
| Timeline |
| Edinburgh Worldwide |
| FIRST TRUST GLOBAL |
Edinburgh Worldwide and FIRST TRUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edinburgh Worldwide and FIRST TRUST
The main advantage of trading using opposite Edinburgh Worldwide and FIRST TRUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edinburgh Worldwide 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.| Edinburgh Worldwide vs. Aberdeen New India | Edinburgh Worldwide vs. VinaCapital Vietnam Opportunity | Edinburgh Worldwide vs. Downing Strategic Micro Cap | Edinburgh Worldwide vs. CT Private Equity |
| FIRST TRUST vs. Edinburgh Worldwide Investment | FIRST TRUST vs. BlackRock Latin American | FIRST TRUST vs. Coor Service Management | FIRST TRUST vs. Franklin FTSE Brazil |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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