Correlation Between First Trust and CI Short
Can any of the company-specific risk be diversified away by investing in both First Trust and CI Short 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 CI Short 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 CI Short Term, you can compare the effects of market volatilities on First Trust and CI Short 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 CI Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and CI Short.
Diversification Opportunities for First Trust and CI Short
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and FGB is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding First Trust AlphaDEX and CI Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Short Term 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 CI Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Short Term has no effect on the direction of First Trust i.e., First Trust and CI Short go up and down completely randomly.
Pair Corralation between First Trust and CI Short
Assuming the 90 days trading horizon First Trust AlphaDEX is expected to generate 6.6 times more return on investment than CI Short. However, First Trust is 6.6 times more volatile than CI Short Term. It trades about 0.13 of its potential returns per unit of risk. CI Short Term is currently generating about 0.21 per unit of risk. If you would invest 10,075 in First Trust AlphaDEX on September 13, 2024 and sell it today you would earn a total of 321.00 from holding First Trust AlphaDEX or generate 3.19% 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 AlphaDEX vs. CI Short Term
Performance |
| Timeline |
| First Trust AlphaDEX |
| CI Short Term |
First Trust and CI Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and CI Short
The main advantage of trading using opposite First Trust and CI Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, CI Short 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 CI Short will offset losses from the drop in CI Short's long position.| First Trust vs. First Trust AlphaDEX | First Trust vs. FT AlphaDEX Industrials | First Trust vs. BMO SPTSX Equal | First Trust vs. First Trust Senior |
| CI Short vs. iShares Canadian Universe | CI Short vs. iShares Canadian Real | CI Short vs. iShares Core Canadian | CI Short vs. iShares Core Canadian |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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