Correlation Between First Trust and AltShares Event
Can any of the company-specific risk be diversified away by investing in both First Trust and AltShares Event 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 AltShares Event into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Managed and AltShares Event Driven ETF, you can compare the effects of market volatilities on First Trust and AltShares Event 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 AltShares Event. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and AltShares Event.
Diversification Opportunities for First Trust and AltShares Event
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and AltShares is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Managed and AltShares Event Driven ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltShares Event Driven 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 Managed are associated (or correlated) with AltShares Event. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltShares Event Driven has no effect on the direction of First Trust i.e., First Trust and AltShares Event go up and down completely randomly.
Pair Corralation between First Trust and AltShares Event
Considering the 90-day investment horizon First Trust is expected to generate 1.76 times less return on investment than AltShares Event. In addition to that, First Trust is 1.01 times more volatile than AltShares Event Driven ETF. It trades about 0.03 of its total potential returns per unit of risk. AltShares Event Driven ETF is currently generating about 0.06 per unit of volatility. If you would invest 926.00 in AltShares Event Driven ETF on September 3, 2024 and sell it today you would earn a total of 150.50 from holding AltShares Event Driven ETF or generate 16.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Managed vs. AltShares Event Driven ETF
Performance |
| Timeline |
| First Trust Managed |
| AltShares Event Driven |
First Trust and AltShares Event Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and AltShares Event
The main advantage of trading using opposite First Trust and AltShares Event positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, AltShares Event 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 AltShares Event will offset losses from the drop in AltShares Event's long position.| First Trust vs. WisdomTree Managed Futures | First Trust vs. First Trust LongShort | First Trust vs. First Trust Alternative | First Trust vs. iMGP DBi Managed |
| AltShares Event vs. First Trust Managed | AltShares Event vs. ProShares Merger ETF | AltShares Event vs. Franklin Liberty Systematic | AltShares Event vs. Overlay Shares Foreign |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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