Correlation Between First Trust and ClearShares Ultra
Can any of the company-specific risk be diversified away by investing in both First Trust and ClearShares Ultra 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 ClearShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Enhanced and ClearShares Ultra Short Maturity, you can compare the effects of market volatilities on First Trust and ClearShares Ultra 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 ClearShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and ClearShares Ultra.
Diversification Opportunities for First Trust and ClearShares Ultra
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and ClearShares is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Enhanced and ClearShares Ultra Short Maturi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearShares Ultra Short 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 Enhanced are associated (or correlated) with ClearShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearShares Ultra Short has no effect on the direction of First Trust i.e., First Trust and ClearShares Ultra go up and down completely randomly.
Pair Corralation between First Trust and ClearShares Ultra
Given the investment horizon of 90 days First Trust Enhanced is expected to generate 1.31 times more return on investment than ClearShares Ultra. However, First Trust is 1.31 times more volatile than ClearShares Ultra Short Maturity. It trades about 0.64 of its potential returns per unit of risk. ClearShares Ultra Short Maturity is currently generating about 0.83 per unit of risk. If you would invest 5,691 in First Trust Enhanced on August 26, 2024 and sell it today you would earn a total of 302.00 from holding First Trust Enhanced or generate 5.31% 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 Enhanced vs. ClearShares Ultra Short Maturi
Performance |
| Timeline |
| First Trust Enhanced |
| ClearShares Ultra Short |
First Trust and ClearShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and ClearShares Ultra
The main advantage of trading using opposite First Trust and ClearShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, ClearShares Ultra 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 ClearShares Ultra will offset losses from the drop in ClearShares Ultra's long position.| First Trust vs. First Trust Low | First Trust vs. First Trust Senior | First Trust vs. First Trust TCW | First Trust vs. First Trust Tactical |
| ClearShares Ultra vs. First Trust Low | ClearShares Ultra vs. First Trust Senior | ClearShares Ultra vs. First Trust TCW | ClearShares Ultra vs. First Trust Tactical |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |