Correlation Between First Trust and Gabelli ETFs
Can any of the company-specific risk be diversified away by investing in both First Trust and Gabelli ETFs 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 Gabelli ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Exchange Traded and Gabelli ETFs Trust, you can compare the effects of market volatilities on First Trust and Gabelli ETFs 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 Gabelli ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Gabelli ETFs.
Diversification Opportunities for First Trust and Gabelli ETFs
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Gabelli is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Exchange Traded and Gabelli ETFs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli ETFs Trust 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 Exchange Traded are associated (or correlated) with Gabelli ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli ETFs Trust has no effect on the direction of First Trust i.e., First Trust and Gabelli ETFs go up and down completely randomly.
Pair Corralation between First Trust and Gabelli ETFs
Given the investment horizon of 90 days First Trust Exchange Traded is expected to under-perform the Gabelli ETFs. In addition to that, First Trust is 1.46 times more volatile than Gabelli ETFs Trust. It trades about -0.08 of its total potential returns per unit of risk. Gabelli ETFs Trust is currently generating about -0.03 per unit of volatility. If you would invest 3,490 in Gabelli ETFs Trust on January 15, 2025 and sell it today you would lose (141.00) from holding Gabelli ETFs Trust or give up 4.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Exchange Traded vs. Gabelli ETFs Trust
Performance |
| Timeline |
| First Trust Exchange |
| Gabelli ETFs Trust |
First Trust and Gabelli ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Gabelli ETFs
The main advantage of trading using opposite First Trust and Gabelli ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Gabelli ETFs 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 Gabelli ETFs will offset losses from the drop in Gabelli ETFs' long position.| First Trust vs. First Trust Expanded | First Trust vs. First Trust Exchange Traded | First Trust vs. First Trust Exchange Traded | First Trust vs. First Trust International |
| Gabelli ETFs vs. First Trust Indxx | Gabelli ETFs vs. Direxion Daily Industrials | Gabelli ETFs vs. Themes Transatlantic Defense | Gabelli ETFs vs. FlexShares STOXX Global |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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