Correlation Between First Trust and Even Herd
Can any of the company-specific risk be diversified away by investing in both First Trust and Even Herd 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 Even Herd 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 Even Herd Long, you can compare the effects of market volatilities on First Trust and Even Herd 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 Even Herd. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Even Herd.
Diversification Opportunities for First Trust and Even Herd
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Even is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding First Trust LongShort and Even Herd Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Even Herd Long 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 Even Herd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Even Herd Long has no effect on the direction of First Trust i.e., First Trust and Even Herd go up and down completely randomly.
Pair Corralation between First Trust and Even Herd
Given the investment horizon of 90 days First Trust is expected to generate 1.49 times less return on investment than Even Herd. But when comparing it to its historical volatility, First Trust LongShort is 1.84 times less risky than Even Herd. It trades about 0.13 of its potential returns per unit of risk. Even Herd Long is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,061 in Even Herd Long on September 1, 2024 and sell it today you would earn a total of 277.00 from holding Even Herd Long or generate 13.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
First Trust LongShort vs. Even Herd Long
Performance |
| Timeline |
| First Trust LongShort |
| Even Herd Long |
First Trust and Even Herd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Even Herd
The main advantage of trading using opposite First Trust and Even Herd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Even Herd 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 Even Herd will offset losses from the drop in Even Herd'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 |
| Even Herd vs. Tidal Trust II | Even Herd vs. ProShares Merger ETF | Even Herd vs. Simplify Exchange Traded | Even Herd vs. Tuttle Capital Shareholders |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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