Correlation Between First Trust and ProShares Long
Can any of the company-specific risk be diversified away by investing in both First Trust and ProShares Long 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 ProShares Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust LongShort and ProShares Long OnlineShort, you can compare the effects of market volatilities on First Trust and ProShares Long 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 ProShares Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and ProShares Long.
Diversification Opportunities for First Trust and ProShares Long
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and ProShares is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding First Trust LongShort and ProShares Long OnlineShort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Long Onlin 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 LongShort are associated (or correlated) with ProShares Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Long Onlin has no effect on the direction of First Trust i.e., First Trust and ProShares Long go up and down completely randomly.
Pair Corralation between First Trust and ProShares Long
Given the investment horizon of 90 days First Trust LongShort is expected to generate 0.49 times more return on investment than ProShares Long. However, First Trust LongShort is 2.03 times less risky than ProShares Long. It trades about 0.25 of its potential returns per unit of risk. ProShares Long OnlineShort is currently generating about 0.03 per unit of risk. If you would invest 6,417 in First Trust LongShort on August 30, 2024 and sell it today you would earn a total of 182.00 from holding First Trust LongShort or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
First Trust LongShort vs. ProShares Long OnlineShort
Performance |
| Timeline |
| First Trust LongShort |
| ProShares Long Onlin |
First Trust and ProShares Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and ProShares Long
The main advantage of trading using opposite First Trust and ProShares Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, ProShares Long 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 ProShares Long will offset losses from the drop in ProShares Long's long position.| First Trust vs. First Trust Managed | First Trust vs. IQ Hedge Multi Strategy | First Trust vs. First Trust BuyWrite | First Trust vs. SPDR SSgA Global |
| ProShares Long vs. ProShares Online Retail | ProShares Long vs. Amplify Online Retail | ProShares Long vs. ProShares Decline of | ProShares Long vs. Global X E commerce |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |