Correlation Between First Trust and Grandeur Peak
Can any of the company-specific risk be diversified away by investing in both First Trust and Grandeur Peak 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 Grandeur Peak 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 Grandeur Peak Global, you can compare the effects of market volatilities on First Trust and Grandeur Peak 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 Grandeur Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Grandeur Peak.
Diversification Opportunities for First Trust and Grandeur Peak
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Grandeur is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding First Trust NASDAQ and Grandeur Peak Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grandeur Peak Global 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 Grandeur Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grandeur Peak Global has no effect on the direction of First Trust i.e., First Trust and Grandeur Peak go up and down completely randomly.
Pair Corralation between First Trust and Grandeur Peak
Given the investment horizon of 90 days First Trust is expected to generate 944.0 times less return on investment than Grandeur Peak. In addition to that, First Trust is 1.65 times more volatile than Grandeur Peak Global. It trades about 0.0 of its total potential returns per unit of risk. Grandeur Peak Global is currently generating about 0.16 per unit of volatility. If you would invest 1,680 in Grandeur Peak Global on August 27, 2024 and sell it today you would earn a total of 33.00 from holding Grandeur Peak Global or generate 1.96% 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 NASDAQ vs. Grandeur Peak Global
Performance |
| Timeline |
| First Trust NASDAQ |
| Grandeur Peak Global |
First Trust and Grandeur Peak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Grandeur Peak
The main advantage of trading using opposite First Trust and Grandeur Peak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Grandeur Peak 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 Grandeur Peak will offset losses from the drop in Grandeur Peak's long position.| First Trust vs. First Trust Global | First Trust vs. Invesco Global Clean | First Trust vs. ALPS Clean Energy | First Trust vs. SPDR Kensho Clean |
| Grandeur Peak vs. Grandeur Peak Global | Grandeur Peak vs. Grandeur Peak Global | Grandeur Peak vs. Grandeur Peak International | Grandeur Peak vs. Grandeur Peak International |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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