Correlation Between First Trust and Dynamic Active
Can any of the company-specific risk be diversified away by investing in both First Trust and Dynamic Active 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 Dynamic Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust NYSE and Dynamic Active Canadian, you can compare the effects of market volatilities on First Trust and Dynamic Active 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 Dynamic Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Dynamic Active.
Diversification Opportunities for First Trust and Dynamic Active
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Dynamic is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding First Trust NYSE and Dynamic Active Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynamic Active Canadian 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 NYSE are associated (or correlated) with Dynamic Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynamic Active Canadian has no effect on the direction of First Trust i.e., First Trust and Dynamic Active go up and down completely randomly.
Pair Corralation between First Trust and Dynamic Active
Assuming the 90 days trading horizon First Trust NYSE is expected to under-perform the Dynamic Active. In addition to that, First Trust is 2.85 times more volatile than Dynamic Active Canadian. It trades about -0.39 of its total potential returns per unit of risk. Dynamic Active Canadian is currently generating about 0.29 per unit of volatility. If you would invest 2,157 in Dynamic Active Canadian on October 10, 2025 and sell it today you would earn a total of 18.00 from holding Dynamic Active Canadian or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust NYSE vs. Dynamic Active Canadian
Performance |
| Timeline |
| First Trust NYSE |
| Dynamic Active Canadian |
First Trust and Dynamic Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Dynamic Active
The main advantage of trading using opposite First Trust and Dynamic Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Dynamic Active 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 Dynamic Active will offset losses from the drop in Dynamic Active's long position.The idea behind First Trust NYSE and Dynamic Active Canadian pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dynamic Active vs. Dynamic Active Dividend | Dynamic Active vs. Dynamic Active Global | Dynamic Active vs. Dynamic Active Mining | Dynamic Active vs. Dynamic Active Global |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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