Correlation Between First Trust and IShares ESG
Can any of the company-specific risk be diversified away by investing in both First Trust and IShares ESG 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 IShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Exchange Traded and iShares ESG 1 5, you can compare the effects of market volatilities on First Trust and IShares ESG 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 IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and IShares ESG.
Diversification Opportunities for First Trust and IShares ESG
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and IShares is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Exchange Traded and iShares ESG 1 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG 1 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 Exchange Traded are associated (or correlated) with IShares ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ESG 1 has no effect on the direction of First Trust i.e., First Trust and IShares ESG go up and down completely randomly.
Pair Corralation between First Trust and IShares ESG
Given the investment horizon of 90 days First Trust Exchange Traded is expected to generate 2.8 times more return on investment than IShares ESG. However, First Trust is 2.8 times more volatile than iShares ESG 1 5. It trades about 0.2 of its potential returns per unit of risk. iShares ESG 1 5 is currently generating about 0.38 per unit of risk. If you would invest 2,049 in First Trust Exchange Traded on December 1, 2024 and sell it today you would earn a total of 27.00 from holding First Trust Exchange Traded or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Exchange Traded vs. iShares ESG 1 5
Performance |
| Timeline |
| First Trust Exchange |
| iShares ESG 1 |
First Trust and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and IShares ESG
The main advantage of trading using opposite First Trust and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, IShares ESG 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 IShares ESG will offset losses from the drop in IShares ESG's long position.| First Trust vs. VanEck Vectors Moodys | First Trust vs. Valued Advisers Trust | First Trust vs. Xtrackers California Municipal | First Trust vs. Principal Exchange Traded Funds |
| IShares ESG vs. VanEck Vectors Moodys | IShares ESG vs. Valued Advisers Trust | IShares ESG vs. Xtrackers California Municipal | IShares ESG vs. Principal Exchange Traded Funds |
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.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |