Correlation Between First Trust and Guinness Atkinson
Can any of the company-specific risk be diversified away by investing in both First Trust and Guinness Atkinson 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 Guinness Atkinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Nasdaq and Guinness Atkinson Funds, you can compare the effects of market volatilities on First Trust and Guinness Atkinson 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 Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Guinness Atkinson.
Diversification Opportunities for First Trust and Guinness Atkinson
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Guinness is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Nasdaq and Guinness Atkinson Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson 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 Nasdaq are associated (or correlated) with Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson Funds has no effect on the direction of First Trust i.e., First Trust and Guinness Atkinson go up and down completely randomly.
Pair Corralation between First Trust and Guinness Atkinson
Given the investment horizon of 90 days First Trust Nasdaq is expected to generate 1.18 times more return on investment than Guinness Atkinson. However, First Trust is 1.18 times more volatile than Guinness Atkinson Funds. It trades about 0.26 of its potential returns per unit of risk. Guinness Atkinson Funds is currently generating about -0.22 per unit of risk. If you would invest 2,925 in First Trust Nasdaq on August 29, 2024 and sell it today you would earn a total of 235.00 from holding First Trust Nasdaq or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Nasdaq vs. Guinness Atkinson Funds
Performance |
| Timeline |
| First Trust Nasdaq |
| Guinness Atkinson Funds |
First Trust and Guinness Atkinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Guinness Atkinson
The main advantage of trading using opposite First Trust and Guinness Atkinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Guinness Atkinson 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 Guinness Atkinson will offset losses from the drop in Guinness Atkinson's long position.| First Trust vs. First Trust Nasdaq | First Trust vs. First Trust Nasdaq | First Trust vs. First Trust Nasdaq | First Trust vs. First Trust Nasdaq |
| Guinness Atkinson vs. GraniteShares 125x Long | Guinness Atkinson vs. Emeren Group | Guinness Atkinson vs. Ascent Solar Technologies, | Guinness Atkinson vs. Spire Global |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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