Correlation Between Huber Capital and First Trust
Can any of the company-specific risk be diversified away by investing in both Huber Capital 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 Huber Capital and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huber Capital Diversified and First Trust Short, you can compare the effects of market volatilities on Huber Capital 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 Huber Capital with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huber Capital and First Trust.
Diversification Opportunities for Huber Capital and First Trust
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huber and First is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Huber Capital Diversified and First Trust Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Short and Huber Capital 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 Huber Capital Diversified 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 Short has no effect on the direction of Huber Capital i.e., Huber Capital and First Trust go up and down completely randomly.
Pair Corralation between Huber Capital and First Trust
Assuming the 90 days horizon Huber Capital Diversified is expected to generate 4.48 times more return on investment than First Trust. However, Huber Capital is 4.48 times more volatile than First Trust Short. It trades about 0.08 of its potential returns per unit of risk. First Trust Short is currently generating about 0.17 per unit of risk. If you would invest 1,819 in Huber Capital Diversified on September 3, 2024 and sell it today you would earn a total of 694.00 from holding Huber Capital Diversified or generate 38.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huber Capital Diversified vs. First Trust Short
Performance |
| Timeline |
| Huber Capital Diversified |
| First Trust Short |
Huber Capital and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huber Capital and First Trust
The main advantage of trading using opposite Huber Capital and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huber Capital 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.| Huber Capital vs. Vanguard Value Index | Huber Capital vs. Dodge Cox Stock | Huber Capital vs. American Mutual Fund | Huber Capital vs. American Funds American |
| First Trust vs. Huber Capital Diversified | First Trust vs. Evaluator Conservative Rms | First Trust vs. Oppenheimer International Diversified | First Trust vs. Prudential Core Conservative |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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