Correlation Between First Trust and Imagination
Can any of the company-specific risk be diversified away by investing in both First Trust and Imagination 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 Imagination into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust S Network and Imagination TV, you can compare the effects of market volatilities on First Trust and Imagination 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 Imagination. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Imagination.
Diversification Opportunities for First Trust and Imagination
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Imagination is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding First Trust S Network and Imagination TV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imagination TV 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 S Network are associated (or correlated) with Imagination. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imagination TV has no effect on the direction of First Trust i.e., First Trust and Imagination go up and down completely randomly.
Pair Corralation between First Trust and Imagination
If you would invest 2,673 in First Trust S Network on August 26, 2024 and sell it today you would earn a total of 995.00 from holding First Trust S Network or generate 37.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
First Trust S Network vs. Imagination TV
Performance |
| Timeline |
| First Trust S |
| Imagination TV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Trust and Imagination Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Imagination
The main advantage of trading using opposite First Trust and Imagination positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Imagination 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 Imagination will offset losses from the drop in Imagination's long position.| First Trust vs. Ember Therapeutics | First Trust vs. Leone Asset Management | First Trust vs. Opus Magnum Ameris |
| Imagination vs. Walt Disney | Imagination vs. Roku Inc | Imagination vs. AMC Entertainment Holdings | Imagination vs. Paramount Global Class |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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