Correlation Between First Trust and Flow Capital
Can any of the company-specific risk be diversified away by investing in both First Trust and Flow 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 Flow Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Senior and Flow Capital Corp, you can compare the effects of market volatilities on First Trust and Flow 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 Flow Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Flow Capital.
Diversification Opportunities for First Trust and Flow Capital
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Flow is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Senior and Flow Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Capital Corp 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 Senior are associated (or correlated) with Flow Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Capital Corp has no effect on the direction of First Trust i.e., First Trust and Flow Capital go up and down completely randomly.
Pair Corralation between First Trust and Flow Capital
If you would invest 1,023 in First Trust Senior on August 28, 2024 and sell it today you would earn a total of 21.00 from holding First Trust Senior or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
First Trust Senior vs. Flow Capital Corp
Performance |
| Timeline |
| First Trust Senior |
| Flow Capital Corp |
First Trust and Flow Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Flow Capital
The main advantage of trading using opposite First Trust and Flow Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Flow 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 Flow Capital will offset losses from the drop in Flow Capital's long position.| First Trust vs. Federated Premier Municipal | First Trust vs. Blackrock Muniyield | First Trust vs. Diamond Hill Investment | First Trust vs. NXG NextGen Infrastructure |
| Flow Capital vs. Guardian Capital Group | Flow Capital vs. Urbana | Flow Capital vs. Princeton Capital | Flow Capital vs. Blackhawk Growth Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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