Correlation Between First Trust and Purpose Core
Can any of the company-specific risk be diversified away by investing in both First Trust and Purpose Core 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 Purpose Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Canadian and Purpose Core Dividend, you can compare the effects of market volatilities on First Trust and Purpose Core 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 Purpose Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Purpose Core.
Diversification Opportunities for First Trust and Purpose Core
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Purpose is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Canadian and Purpose Core Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purpose Core Dividend 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 Canadian are associated (or correlated) with Purpose Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purpose Core Dividend has no effect on the direction of First Trust i.e., First Trust and Purpose Core go up and down completely randomly.
Pair Corralation between First Trust and Purpose Core
Assuming the 90 days trading horizon First Trust Canadian is expected to generate 1.53 times more return on investment than Purpose Core. However, First Trust is 1.53 times more volatile than Purpose Core Dividend. It trades about 0.12 of its potential returns per unit of risk. Purpose Core Dividend is currently generating about 0.13 per unit of risk. If you would invest 5,530 in First Trust Canadian on September 27, 2025 and sell it today you would earn a total of 1,684 from holding First Trust Canadian or generate 30.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Canadian vs. Purpose Core Dividend
Performance |
| Timeline |
| First Trust Canadian |
| Purpose Core Dividend |
First Trust and Purpose Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Purpose Core
The main advantage of trading using opposite First Trust and Purpose Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Purpose Core 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 Purpose Core will offset losses from the drop in Purpose Core's long position.| First Trust vs. iShares ESG Equity | First Trust vs. iShares MSCI Min | First Trust vs. Invesco RAFI Canadian | First Trust vs. Desjardins RI Developed |
| Purpose Core vs. Purpose International Dividend | Purpose Core vs. Purpose Enhanced Dividend | Purpose Core vs. iShares High Dividend | Purpose Core vs. Fidelity Value Currency |
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 CEOs Directory module to screen CEOs from public companies around the world.
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