Correlation Between First Trust and RiverNorth Flexible
Can any of the company-specific risk be diversified away by investing in both First Trust and RiverNorth Flexible 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 RiverNorth Flexible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Energy and RiverNorth Flexible Municipalome, you can compare the effects of market volatilities on First Trust and RiverNorth Flexible 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 RiverNorth Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and RiverNorth Flexible.
Diversification Opportunities for First Trust and RiverNorth Flexible
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and RiverNorth is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Energy and RiverNorth Flexible Municipalo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiverNorth Flexible 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 Energy are associated (or correlated) with RiverNorth Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiverNorth Flexible has no effect on the direction of First Trust i.e., First Trust and RiverNorth Flexible go up and down completely randomly.
Pair Corralation between First Trust and RiverNorth Flexible
Considering the 90-day investment horizon First Trust Energy is expected to generate 1.64 times more return on investment than RiverNorth Flexible. However, First Trust is 1.64 times more volatile than RiverNorth Flexible Municipalome. It trades about 0.06 of its potential returns per unit of risk. RiverNorth Flexible Municipalome is currently generating about 0.04 per unit of risk. If you would invest 1,453 in First Trust Energy on August 27, 2024 and sell it today you would earn a total of 111.00 from holding First Trust Energy or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 25.71% |
| Values | Daily Returns |
First Trust Energy vs. RiverNorth Flexible Municipalo
Performance |
| Timeline |
| First Trust Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| RiverNorth Flexible |
First Trust and RiverNorth Flexible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and RiverNorth Flexible
The main advantage of trading using opposite First Trust and RiverNorth Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, RiverNorth Flexible 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 RiverNorth Flexible will offset losses from the drop in RiverNorth Flexible's long position.| First Trust vs. Voya Global Equity | First Trust vs. Blackrock Enhanced Capital | First Trust vs. First Trust Intermediate | First Trust vs. Franklin Templeton Limited |
| RiverNorth Flexible vs. Blackrock Muniholdings Ny | RiverNorth Flexible vs. MFS Investment Grade | RiverNorth Flexible vs. Eaton Vance National | RiverNorth Flexible vs. Invesco High Income |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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