Correlation Between First Trust and CBH
Can any of the company-specific risk be diversified away by investing in both First Trust and CBH 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 CBH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Intermediate and CBH, you can compare the effects of market volatilities on First Trust and CBH 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 CBH. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and CBH.
Diversification Opportunities for First Trust and CBH
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and CBH is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Intermediate and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH 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 Intermediate are associated (or correlated) with CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of First Trust i.e., First Trust and CBH go up and down completely randomly.
Pair Corralation between First Trust and CBH
If you would invest 1,791 in CBH on September 18, 2024 and sell it today you would earn a total of 0.00 from holding CBH or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 9.52% |
| Values | Daily Returns |
First Trust Intermediate vs. CBH
Performance |
| Timeline |
| First Trust Intermediate |
| CBH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Trust and CBH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and CBH
The main advantage of trading using opposite First Trust and CBH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, CBH 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 CBH will offset losses from the drop in CBH's long position.| First Trust vs. RiverNorth Flexible Municipalome | First Trust vs. DWS Municipal Income | First Trust vs. Blackrock Munivest | First Trust vs. MFS Municipal Income |
| CBH vs. Brookfield Real Assets | CBH vs. Guggenheim Strategic Opportunities | CBH vs. Cornerstone Strategic Return | CBH vs. Cornerstone Strategic Value |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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