Correlation Between Strategy Shares and First Trust
Can any of the company-specific risk be diversified away by investing in both Strategy Shares and First Trust 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 Strategy Shares and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategy Shares Gold Hedged and First Trust TCW, you can compare the effects of market volatilities on Strategy Shares and First Trust 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 Strategy Shares with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategy Shares and First Trust.
Diversification Opportunities for Strategy Shares and First Trust
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Strategy and First is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Strategy Shares Gold Hedged and First Trust TCW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust TCW and Strategy Shares 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 Strategy Shares Gold Hedged are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust TCW has no effect on the direction of Strategy Shares i.e., Strategy Shares and First Trust go up and down completely randomly.
Pair Corralation between Strategy Shares and First Trust
If you would invest 2,474 in First Trust TCW on August 28, 2024 and sell it today you would earn a total of 1.00 from holding First Trust TCW or generate 0.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Strategy Shares Gold Hedged vs. First Trust TCW
Performance |
| Timeline |
| Strategy Shares Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Trust TCW |
Strategy Shares and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategy Shares and First Trust
The main advantage of trading using opposite Strategy Shares and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategy Shares position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Strategy Shares vs. Global Blockchain Acquisition | Strategy Shares vs. First Trust Lunt | Strategy Shares vs. Great Southern Bancorp | Strategy Shares vs. RiverFront Strategic Income |
| First Trust vs. First Trust TCW | First Trust vs. First Trust Low | First Trust vs. First Trust Enhanced | First Trust vs. First Trust Senior |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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