Correlation Between First Trust and Siren Nasdaq
Can any of the company-specific risk be diversified away by investing in both First Trust and Siren Nasdaq 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 Siren Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Indxx and Siren Nasdaq NexGen, you can compare the effects of market volatilities on First Trust and Siren Nasdaq 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 Siren Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Siren Nasdaq.
Diversification Opportunities for First Trust and Siren Nasdaq
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Siren is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Indxx and Siren Nasdaq NexGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siren Nasdaq NexGen 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 Indxx are associated (or correlated) with Siren Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siren Nasdaq NexGen has no effect on the direction of First Trust i.e., First Trust and Siren Nasdaq go up and down completely randomly.
Pair Corralation between First Trust and Siren Nasdaq
Given the investment horizon of 90 days First Trust is expected to generate 1.81 times less return on investment than Siren Nasdaq. But when comparing it to its historical volatility, First Trust Indxx is 2.82 times less risky than Siren Nasdaq. It trades about 0.1 of its potential returns per unit of risk. Siren Nasdaq NexGen is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,109 in Siren Nasdaq NexGen on August 26, 2024 and sell it today you would earn a total of 801.00 from holding Siren Nasdaq NexGen or generate 37.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Indxx vs. Siren Nasdaq NexGen
Performance |
| Timeline |
| First Trust Indxx |
| Siren Nasdaq NexGen |
First Trust and Siren Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Siren Nasdaq
The main advantage of trading using opposite First Trust and Siren Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Siren Nasdaq 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 Siren Nasdaq will offset losses from the drop in Siren Nasdaq's long position.| First Trust vs. Grayscale Bitcoin Trust | First Trust vs. Siren Nasdaq NexGen | First Trust vs. Grayscale Bitcoin Mini | First Trust vs. First Trust SkyBridge |
| Siren Nasdaq vs. Grayscale Bitcoin Trust | Siren Nasdaq vs. Grayscale Bitcoin Mini | Siren Nasdaq vs. First Trust SkyBridge |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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