Correlation Between First Trust and Harvest Global
Can any of the company-specific risk be diversified away by investing in both First Trust and Harvest Global 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 Harvest Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Indxx and Harvest Global REIT, you can compare the effects of market volatilities on First Trust and Harvest Global 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 Harvest Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Harvest Global.
Diversification Opportunities for First Trust and Harvest Global
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Harvest is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Indxx and Harvest Global REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Global REIT 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 Indxx are associated (or correlated) with Harvest Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Global REIT has no effect on the direction of First Trust i.e., First Trust and Harvest Global go up and down completely randomly.
Pair Corralation between First Trust and Harvest Global
Assuming the 90 days trading horizon First Trust Indxx is expected to under-perform the Harvest Global. But the etf apears to be less risky and, when comparing its historical volatility, First Trust Indxx is 3.18 times less risky than Harvest Global. The etf trades about -0.21 of its potential returns per unit of risk. The Harvest Global REIT is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 625.00 in Harvest Global REIT on September 1, 2024 and sell it today you would earn a total of 21.00 from holding Harvest Global REIT or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Indxx vs. Harvest Global REIT
Performance |
| Timeline |
| First Trust Indxx |
| Harvest Global REIT |
First Trust and Harvest Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Harvest Global
The main advantage of trading using opposite First Trust and Harvest Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Harvest Global 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 Harvest Global will offset losses from the drop in Harvest Global's long position.| First Trust vs. iShares Canadian HYBrid | First Trust vs. Brompton European Dividend | First Trust vs. Solar Alliance Energy | First Trust vs. PHN Multi Style All Cap |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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