Correlation Between First Trust and Invesco BulletShares
Can any of the company-specific risk be diversified away by investing in both First Trust and Invesco BulletShares 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 Invesco BulletShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Short and Invesco BulletShares 2028, you can compare the effects of market volatilities on First Trust and Invesco BulletShares 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 Invesco BulletShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Invesco BulletShares.
Diversification Opportunities for First Trust and Invesco BulletShares
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Invesco is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Short and Invesco BulletShares 2028 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco BulletShares 2028 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 Short are associated (or correlated) with Invesco BulletShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco BulletShares 2028 has no effect on the direction of First Trust i.e., First Trust and Invesco BulletShares go up and down completely randomly.
Pair Corralation between First Trust and Invesco BulletShares
Given the investment horizon of 90 days First Trust is expected to generate 1.03 times less return on investment than Invesco BulletShares. But when comparing it to its historical volatility, First Trust Short is 2.14 times less risky than Invesco BulletShares. It trades about 0.44 of its potential returns per unit of risk. Invesco BulletShares 2028 is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,190 in Invesco BulletShares 2028 on October 4, 2025 and sell it today you would earn a total of 9.50 from holding Invesco BulletShares 2028 or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
First Trust Short vs. Invesco BulletShares 2028
Performance |
| Timeline |
| First Trust Short |
| Invesco BulletShares 2028 |
First Trust and Invesco BulletShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Invesco BulletShares
The main advantage of trading using opposite First Trust and Invesco BulletShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Invesco BulletShares 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 Invesco BulletShares will offset losses from the drop in Invesco BulletShares' long position.| First Trust vs. American Century Diversified | First Trust vs. Columbia Multi Sector Municipal | First Trust vs. Dimensional ETF Trust | First Trust vs. Sterling Capital Enhanced |
| Invesco BulletShares vs. Sterling Capital Enhanced | Invesco BulletShares vs. SPDR SP Software | Invesco BulletShares vs. SPDR SP International | Invesco BulletShares vs. iShares ESG Screened |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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