Correlation Between First Trust and Tuttle Capital
Can any of the company-specific risk be diversified away by investing in both First Trust and Tuttle Capital 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 Tuttle Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Alternative and Tuttle Capital Shareholders, you can compare the effects of market volatilities on First Trust and Tuttle Capital 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 Tuttle Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Tuttle Capital.
Diversification Opportunities for First Trust and Tuttle Capital
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Tuttle is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Alternative and Tuttle Capital Shareholders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tuttle Capital Share 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 Alternative are associated (or correlated) with Tuttle Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tuttle Capital Share has no effect on the direction of First Trust i.e., First Trust and Tuttle Capital go up and down completely randomly.
Pair Corralation between First Trust and Tuttle Capital
Given the investment horizon of 90 days First Trust is expected to generate 8.58 times less return on investment than Tuttle Capital. But when comparing it to its historical volatility, First Trust Alternative is 1.22 times less risky than Tuttle Capital. It trades about 0.04 of its potential returns per unit of risk. Tuttle Capital Shareholders is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,520 in Tuttle Capital Shareholders on August 31, 2024 and sell it today you would earn a total of 137.00 from holding Tuttle Capital Shareholders or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Alternative vs. Tuttle Capital Shareholders
Performance |
| Timeline |
| First Trust Alternative |
| Tuttle Capital Share |
First Trust and Tuttle Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Tuttle Capital
The main advantage of trading using opposite First Trust and Tuttle Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Tuttle Capital 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 Tuttle Capital will offset losses from the drop in Tuttle Capital's long position.| First Trust vs. First Trust Emerging | First Trust vs. First Trust Income | First Trust vs. First Trust SSI | First Trust vs. First Trust Indxx |
| Tuttle Capital vs. Vanguard Total Stock | Tuttle Capital vs. SPDR SP 500 | Tuttle Capital vs. iShares Core SP | Tuttle Capital vs. Vanguard Dividend Appreciation |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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