Correlation Between BetaPro SPTSX and First Trust
Can any of the company-specific risk be diversified away by investing in both BetaPro SPTSX 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 BetaPro SPTSX and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro SPTSX 60 and First Trust NASDAQ, you can compare the effects of market volatilities on BetaPro SPTSX 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 BetaPro SPTSX with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SPTSX and First Trust.
Diversification Opportunities for BetaPro SPTSX and First Trust
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BetaPro and First is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SPTSX 60 and First Trust NASDAQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust NASDAQ and BetaPro SPTSX 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 BetaPro SPTSX 60 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 NASDAQ has no effect on the direction of BetaPro SPTSX i.e., BetaPro SPTSX and First Trust go up and down completely randomly.
Pair Corralation between BetaPro SPTSX and First Trust
Assuming the 90 days trading horizon BetaPro SPTSX 60 is expected to under-perform the First Trust. But the etf apears to be less risky and, when comparing its historical volatility, BetaPro SPTSX 60 is 1.33 times less risky than First Trust. The etf trades about -0.26 of its potential returns per unit of risk. The First Trust NASDAQ is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,525 in First Trust NASDAQ on September 12, 2024 and sell it today you would earn a total of 770.00 from holding First Trust NASDAQ or generate 17.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro SPTSX 60 vs. First Trust NASDAQ
Performance |
| Timeline |
| BetaPro SPTSX 60 |
| First Trust NASDAQ |
BetaPro SPTSX and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SPTSX and First Trust
The main advantage of trading using opposite BetaPro SPTSX and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SPTSX 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.| BetaPro SPTSX vs. BetaPro SP 500 | BetaPro SPTSX vs. BetaPro NASDAQ 100 2x | BetaPro SPTSX vs. BetaPro SP TSX | BetaPro SPTSX vs. BetaPro SP 500 |
| First Trust vs. First Trust Indxx | First Trust vs. First Trust Senior | First Trust vs. First Trust AlphaDEX | First Trust vs. First Trust Indxx |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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