Correlation Between First Trust and 21shares Core
Can any of the company-specific risk be diversified away by investing in both First Trust and 21shares Core 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 21shares Core 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 21shares Core Ethereum, you can compare the effects of market volatilities on First Trust and 21shares Core 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 21shares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and 21shares Core.
Diversification Opportunities for First Trust and 21shares Core
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and 21shares is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Indxx and 21shares Core Ethereum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 21shares Core Ethereum 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 21shares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 21shares Core Ethereum has no effect on the direction of First Trust i.e., First Trust and 21shares Core go up and down completely randomly.
Pair Corralation between First Trust and 21shares Core
Given the investment horizon of 90 days First Trust is expected to generate 11.12 times less return on investment than 21shares Core. But when comparing it to its historical volatility, First Trust Indxx is 7.92 times less risky than 21shares Core. It trades about 0.07 of its potential returns per unit of risk. 21shares Core Ethereum is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,684 in 21shares Core Ethereum on September 12, 2024 and sell it today you would earn a total of 140.00 from holding 21shares Core Ethereum or generate 8.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
First Trust Indxx vs. 21shares Core Ethereum
Performance |
| Timeline |
| First Trust Indxx |
| 21shares Core Ethereum |
First Trust and 21shares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and 21shares Core
The main advantage of trading using opposite First Trust and 21shares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, 21shares Core 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 21shares Core will offset losses from the drop in 21shares Core's long position.| First Trust vs. Siren Nasdaq NexGen | First Trust vs. Amplify Transformational Data | First Trust vs. Global X Blockchain | First Trust vs. VanEck Digital Transformation |
| 21shares Core vs. Grayscale Bitcoin Trust | 21shares Core vs. Siren Nasdaq NexGen | 21shares Core vs. First Trust Indxx | 21shares Core vs. Bitwise Crypto Industry |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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