Correlation Between SPTSX Dividend and First Trust
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By analyzing existing cross correlation between SPTSX Dividend Aristocrats and First Trust Indxx, 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
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPTSX and First is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SPTSX Dividend Aristocrats and First Trust Indxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Indxx 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 Indxx 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 Aristocrats is expected to generate 0.76 times more return on investment than First Trust. However, SPTSX Dividend Aristocrats is 1.32 times less risky than First Trust. It trades about 0.15 of its potential returns per unit of risk. First Trust Indxx is currently generating about 0.11 per unit of risk. If you would invest 29,986 in SPTSX Dividend Aristocrats on August 29, 2024 and sell it today you would earn a total of 7,304 from holding SPTSX Dividend Aristocrats or generate 24.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
SPTSX Dividend Aristocrats vs. First Trust Indxx
Performance |
| Timeline |
SPTSX Dividend and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
SPTSX Dividend Aristocrats
Pair trading matchups for SPTSX Dividend
First Trust Indxx
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. Thunderbird Entertainment Group | SPTSX Dividend vs. Firan Technology Group | SPTSX Dividend vs. Computer Modelling Group | SPTSX Dividend vs. Northstar Clean Technologies |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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