Correlation Between First Trust and MAAX
Can any of the company-specific risk be diversified away by investing in both First Trust and MAAX 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 MAAX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Municipal and MAAX, you can compare the effects of market volatilities on First Trust and MAAX 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 MAAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and MAAX.
Diversification Opportunities for First Trust and MAAX
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and MAAX is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Municipal and MAAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAAX 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 Municipal are associated (or correlated) with MAAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAAX has no effect on the direction of First Trust i.e., First Trust and MAAX go up and down completely randomly.
Pair Corralation between First Trust and MAAX
If you would invest 4,861 in First Trust Municipal on August 30, 2024 and sell it today you would earn a total of 47.00 from holding First Trust Municipal or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
First Trust Municipal vs. MAAX
Performance |
| Timeline |
| First Trust Municipal |
| MAAX |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Trust and MAAX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and MAAX
The main advantage of trading using opposite First Trust and MAAX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, MAAX 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 MAAX will offset losses from the drop in MAAX's long position.| First Trust vs. SSGA Active Trust | First Trust vs. SPDR Nuveen Municipal | First Trust vs. iShares Short Maturity | First Trust vs. First Trust Flexible |
| MAAX vs. VanEck Short High | MAAX vs. VanEck Long Muni | MAAX vs. VanEck CEF Municipal | MAAX vs. First Trust Municipal |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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