Correlation Between First Trust and Mast Global
Can any of the company-specific risk be diversified away by investing in both First Trust and Mast Global 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 Mast Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Water and Mast Global Battery, you can compare the effects of market volatilities on First Trust and Mast Global 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 Mast Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Mast Global.
Diversification Opportunities for First Trust and Mast Global
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Mast is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Water and Mast Global Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mast Global Battery 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 Water are associated (or correlated) with Mast Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mast Global Battery has no effect on the direction of First Trust i.e., First Trust and Mast Global go up and down completely randomly.
Pair Corralation between First Trust and Mast Global
Considering the 90-day investment horizon First Trust Water is expected to generate 0.76 times more return on investment than Mast Global. However, First Trust Water is 1.32 times less risky than Mast Global. It trades about 0.06 of its potential returns per unit of risk. Mast Global Battery is currently generating about 0.01 per unit of risk. If you would invest 8,238 in First Trust Water on September 3, 2024 and sell it today you would earn a total of 2,795 from holding First Trust Water or generate 33.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 48.08% |
| Values | Daily Returns |
First Trust Water vs. Mast Global Battery
Performance |
| Timeline |
| First Trust Water |
| Mast Global Battery |
First Trust and Mast Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Mast Global
The main advantage of trading using opposite First Trust and Mast Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Mast Global 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 Mast Global will offset losses from the drop in Mast Global's long position.| First Trust vs. Invesco SP Global | First Trust vs. Invesco Global Water | First Trust vs. Invesco Water Resources | First Trust vs. First Trust NASDAQ |
| Mast Global vs. iShares Dividend and | Mast Global vs. Martin Currie Sustainable | Mast Global vs. VictoryShares THB Mid | Mast Global vs. AdvisorShares Gerber Kawasaki |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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