Correlation Between First Trust and Breakwave Dry
Can any of the company-specific risk be diversified away by investing in both First Trust and Breakwave Dry 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 Breakwave Dry 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 Breakwave Dry Bulk, you can compare the effects of market volatilities on First Trust and Breakwave Dry 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 Breakwave Dry. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Breakwave Dry.
Diversification Opportunities for First Trust and Breakwave Dry
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Breakwave is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Nasdaq and Breakwave Dry Bulk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Breakwave Dry Bulk 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 Breakwave Dry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Breakwave Dry Bulk has no effect on the direction of First Trust i.e., First Trust and Breakwave Dry go up and down completely randomly.
Pair Corralation between First Trust and Breakwave Dry
Given the investment horizon of 90 days First Trust Nasdaq is expected to generate 0.35 times more return on investment than Breakwave Dry. However, First Trust Nasdaq is 2.88 times less risky than Breakwave Dry. It trades about 0.06 of its potential returns per unit of risk. Breakwave Dry Bulk is currently generating about 0.0 per unit of risk. If you would invest 2,632 in First Trust Nasdaq on September 1, 2024 and sell it today you would earn a total of 1,010 from holding First Trust Nasdaq or generate 38.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
First Trust Nasdaq vs. Breakwave Dry Bulk
Performance |
| Timeline |
| First Trust Nasdaq |
| Breakwave Dry Bulk |
First Trust and Breakwave Dry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Breakwave Dry
The main advantage of trading using opposite First Trust and Breakwave Dry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Breakwave Dry 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 Breakwave Dry will offset losses from the drop in Breakwave Dry'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 |
| Breakwave Dry vs. SonicShares Global Shipping | Breakwave Dry vs. KraneShares Global Carbon | Breakwave Dry vs. iPath Series B | Breakwave Dry vs. Danaos |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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