Correlation Between First Trust and Regents Park
Can any of the company-specific risk be diversified away by investing in both First Trust and Regents Park 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 Regents Park 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 Regents Park Funds, you can compare the effects of market volatilities on First Trust and Regents Park 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 Regents Park. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Regents Park.
Diversification Opportunities for First Trust and Regents Park
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Regents is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding First Trust LongShort and Regents Park Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regents Park Funds 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 Regents Park. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regents Park Funds has no effect on the direction of First Trust i.e., First Trust and Regents Park go up and down completely randomly.
Pair Corralation between First Trust and Regents Park
If you would invest 6,439 in First Trust LongShort on August 25, 2024 and sell it today you would earn a total of 124.00 from holding First Trust LongShort or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.35% |
| Values | Daily Returns |
First Trust LongShort vs. Regents Park Funds
Performance |
| Timeline |
| First Trust LongShort |
| Regents Park Funds |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Trust and Regents Park Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Regents Park
The main advantage of trading using opposite First Trust and Regents Park positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Regents Park 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 Regents Park will offset losses from the drop in Regents Park'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 |
| Regents Park vs. IQ Merger Arbitrage | Regents Park vs. First Trust LongShort | Regents Park vs. Aquagold International | Regents Park vs. Morningstar Unconstrained Allocation |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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