Correlation Between First Trust and Blackhawk Growth
Can any of the company-specific risk be diversified away by investing in both First Trust and Blackhawk Growth 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 Blackhawk Growth 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 Blackhawk Growth Corp, you can compare the effects of market volatilities on First Trust and Blackhawk Growth 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 Blackhawk Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Blackhawk Growth.
Diversification Opportunities for First Trust and Blackhawk Growth
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Blackhawk is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Senior and Blackhawk Growth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackhawk Growth 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 Blackhawk Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackhawk Growth Corp has no effect on the direction of First Trust i.e., First Trust and Blackhawk Growth go up and down completely randomly.
Pair Corralation between First Trust and Blackhawk Growth
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 Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
First Trust Senior vs. Blackhawk Growth Corp
Performance |
| Timeline |
| First Trust Senior |
| Blackhawk Growth Corp |
First Trust and Blackhawk Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Blackhawk Growth
The main advantage of trading using opposite First Trust and Blackhawk Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Blackhawk Growth 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 Blackhawk Growth will offset losses from the drop in Blackhawk Growth'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 |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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