Correlation Between IShares and First Trust
Can any of the company-specific risk be diversified away by investing in both IShares 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 IShares and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IShares and First Trust Cloud, you can compare the effects of market volatilities on IShares 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 IShares with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares and First Trust.
Diversification Opportunities for IShares and First Trust
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and First is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding IShares and First Trust Cloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Cloud and IShares 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 IShares 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 Cloud has no effect on the direction of IShares i.e., IShares and First Trust go up and down completely randomly.
Pair Corralation between IShares and First Trust
If you would invest 10,737 in First Trust Cloud on September 2, 2024 and sell it today you would earn a total of 1,461 from holding First Trust Cloud or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
IShares vs. First Trust Cloud
Performance |
| Timeline |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Trust Cloud |
IShares and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares and First Trust
The main advantage of trading using opposite IShares and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 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.| IShares vs. First Trust Nasdaq | IShares vs. Global X Robotics | IShares vs. Robo Global Robotics | IShares vs. iShares Cybersecurity and |
| First Trust vs. Global X Cloud | First Trust vs. WisdomTree Cloud Computing | First Trust vs. First Trust NASDAQ | First Trust vs. First Trust Dow |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |