Correlation Between SPTSX Dividend and First Trust
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By analyzing existing cross correlation between SPTSX Dividend Aristocrats and First Trust AlphaDEX, you can compare the effects of market volatilities on SPTSX Dividend 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 SPTSX Dividend with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPTSX Dividend and First Trust.
Diversification Opportunities for SPTSX Dividend and First Trust
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPTSX and First is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SPTSX Dividend Aristocrats and First Trust AlphaDEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust AlphaDEX and SPTSX Dividend 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 SPTSX Dividend Aristocrats 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 AlphaDEX has no effect on the direction of SPTSX Dividend i.e., SPTSX Dividend and First Trust go up and down completely randomly.
Pair Corralation between SPTSX Dividend and First Trust
Assuming the 90 days trading horizon SPTSX Dividend is expected to generate 1.2 times less return on investment than First Trust. But when comparing it to its historical volatility, SPTSX Dividend Aristocrats is 2.35 times less risky than First Trust. It trades about 0.26 of its potential returns per unit of risk. First Trust AlphaDEX is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 8,386 in First Trust AlphaDEX on September 1, 2024 and sell it today you would earn a total of 1,841 from holding First Trust AlphaDEX or generate 21.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
SPTSX Dividend Aristocrats vs. First Trust AlphaDEX
Performance |
| Timeline |
SPTSX Dividend and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
SPTSX Dividend Aristocrats
Pair trading matchups for SPTSX Dividend
First Trust AlphaDEX
Pair trading matchups for First Trust
Pair Trading with SPTSX Dividend and First Trust
The main advantage of trading using opposite SPTSX Dividend and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPTSX Dividend 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.| SPTSX Dividend vs. Metalero Mining Corp | SPTSX Dividend vs. TUT Fitness Group | SPTSX Dividend vs. Dream Industrial Real | SPTSX Dividend vs. Nicola Mining |
| First Trust vs. First Trust AlphaDEX | First Trust vs. FT AlphaDEX Industrials | First Trust vs. BMO SPTSX Equal | 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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