Correlation Between First Trust and Accelerate Canadian
Can any of the company-specific risk be diversified away by investing in both First Trust and Accelerate Canadian 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 Accelerate Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust AlphaDEX and Accelerate Canadian Long, you can compare the effects of market volatilities on First Trust and Accelerate Canadian 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 Accelerate Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Accelerate Canadian.
Diversification Opportunities for First Trust and Accelerate Canadian
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Accelerate is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding First Trust AlphaDEX and Accelerate Canadian Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelerate Canadian Long 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 AlphaDEX are associated (or correlated) with Accelerate Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelerate Canadian Long has no effect on the direction of First Trust i.e., First Trust and Accelerate Canadian go up and down completely randomly.
Pair Corralation between First Trust and Accelerate Canadian
Assuming the 90 days trading horizon First Trust AlphaDEX is expected to under-perform the Accelerate Canadian. In addition to that, First Trust is 1.42 times more volatile than Accelerate Canadian Long. It trades about -0.11 of its total potential returns per unit of risk. Accelerate Canadian Long is currently generating about -0.08 per unit of volatility. If you would invest 2,723 in Accelerate Canadian Long on November 27, 2024 and sell it today you would lose (31.00) from holding Accelerate Canadian Long or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust AlphaDEX vs. Accelerate Canadian Long
Performance |
| Timeline |
| First Trust AlphaDEX |
| Accelerate Canadian Long |
First Trust and Accelerate Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Accelerate Canadian
The main advantage of trading using opposite First Trust and Accelerate Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Accelerate Canadian 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 Accelerate Canadian will offset losses from the drop in Accelerate Canadian's long position.| First Trust vs. First Trust AlphaDEX | First Trust vs. FT AlphaDEX Industrials | First Trust vs. BMO Equal Weight | First Trust vs. iShares Global Healthcare |
| Accelerate Canadian vs. Accelerate Absolute Return | Accelerate Canadian vs. Accelerate Arbitrage | Accelerate Canadian vs. Accelerate OneChoice Alternative | Accelerate Canadian vs. First Trust AlphaDEX |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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