Correlation Between First Trust and KBUY
Can any of the company-specific risk be diversified away by investing in both First Trust and KBUY 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 KBUY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Emerging and KBUY, you can compare the effects of market volatilities on First Trust and KBUY 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 KBUY. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and KBUY.
Diversification Opportunities for First Trust and KBUY
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and KBUY is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Emerging and KBUY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBUY 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 Emerging are associated (or correlated) with KBUY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBUY has no effect on the direction of First Trust i.e., First Trust and KBUY go up and down completely randomly.
Pair Corralation between First Trust and KBUY
If you would invest 2,674 in First Trust Emerging on September 4, 2024 and sell it today you would earn a total of 21.00 from holding First Trust Emerging or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
First Trust Emerging vs. KBUY
Performance |
| Timeline |
| First Trust Emerging |
| KBUY |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Trust and KBUY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and KBUY
The main advantage of trading using opposite First Trust and KBUY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, KBUY 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 KBUY will offset losses from the drop in KBUY's long position.| First Trust vs. First Trust SSI | First Trust vs. First Trust BuyWrite | First Trust vs. First Trust Managed | First Trust vs. First Trust Tactical |
| KBUY vs. Franklin FTSE South | KBUY vs. Franklin FTSE Japan | KBUY vs. Franklin FTSE India | KBUY 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 Stocks Directory module to find actively traded stocks across global markets.
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