Correlation Between Global Atomic and First Trust
Can any of the company-specific risk be diversified away by investing in both Global Atomic 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 Global Atomic and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Atomic Corp and First Trust SMID, you can compare the effects of market volatilities on Global Atomic 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 Global Atomic with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Atomic and First Trust.
Diversification Opportunities for Global Atomic and First Trust
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and First is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Global Atomic Corp and First Trust SMID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust SMID and Global Atomic 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 Global Atomic Corp 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 SMID has no effect on the direction of Global Atomic i.e., Global Atomic and First Trust go up and down completely randomly.
Pair Corralation between Global Atomic and First Trust
Assuming the 90 days trading horizon Global Atomic Corp is expected to under-perform the First Trust. In addition to that, Global Atomic is 3.39 times more volatile than First Trust SMID. It trades about -0.05 of its total potential returns per unit of risk. First Trust SMID is currently generating about 0.26 per unit of volatility. If you would invest 1,972 in First Trust SMID on August 29, 2024 and sell it today you would earn a total of 427.00 from holding First Trust SMID or generate 21.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Global Atomic Corp vs. First Trust SMID
Performance |
| Timeline |
| Global Atomic Corp |
| First Trust SMID |
Global Atomic and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Atomic and First Trust
The main advantage of trading using opposite Global Atomic and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Atomic 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.| Global Atomic vs. enCore Energy Corp | Global Atomic vs. GoviEx Uranium | Global Atomic vs. Baselode Energy Corp | Global Atomic vs. Sprott Physical Uranium |
| First Trust vs. iShares SPTSX 60 | First Trust vs. iShares Core SP | First Trust vs. iShares Core SPTSX | First Trust vs. BMO Aggregate Bond |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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