Correlation Between First Trust and Strategy Shares
Can any of the company-specific risk be diversified away by investing in both First Trust and Strategy Shares 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 Strategy Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Lunt and Strategy Shares Gold Hedged, you can compare the effects of market volatilities on First Trust and Strategy Shares 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 Strategy Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Strategy Shares.
Diversification Opportunities for First Trust and Strategy Shares
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Strategy is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Lunt and Strategy Shares Gold Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares Gold 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 Lunt are associated (or correlated) with Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares Gold has no effect on the direction of First Trust i.e., First Trust and Strategy Shares go up and down completely randomly.
Pair Corralation between First Trust and Strategy Shares
Given the investment horizon of 90 days First Trust is expected to generate 1.45 times less return on investment than Strategy Shares. In addition to that, First Trust is 1.01 times more volatile than Strategy Shares Gold Hedged. It trades about 0.04 of its total potential returns per unit of risk. Strategy Shares Gold Hedged is currently generating about 0.06 per unit of volatility. If you would invest 1,804 in Strategy Shares Gold Hedged on August 26, 2024 and sell it today you would earn a total of 531.00 from holding Strategy Shares Gold Hedged or generate 29.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 84.31% |
| Values | Daily Returns |
First Trust Lunt vs. Strategy Shares Gold Hedged
Performance |
| Timeline |
| First Trust Lunt |
| Strategy Shares Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Trust and Strategy Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Strategy Shares
The main advantage of trading using opposite First Trust and Strategy Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Strategy Shares 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 Strategy Shares will offset losses from the drop in Strategy Shares' long position.| First Trust vs. Morningstar Unconstrained Allocation | First Trust vs. High Yield Municipal Fund | First Trust vs. Via Renewables | First Trust vs. Knife River |
| Strategy Shares vs. Global Blockchain Acquisition | Strategy Shares vs. First Trust Lunt | Strategy Shares vs. Great Southern Bancorp | Strategy Shares vs. RiverFront Strategic Income |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |