Correlation Between TrueShares Structured and First Trust
Can any of the company-specific risk be diversified away by investing in both TrueShares Structured 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 TrueShares Structured and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TrueShares Structured Outcome and First Trust Cboe, you can compare the effects of market volatilities on TrueShares Structured 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 TrueShares Structured with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of TrueShares Structured and First Trust.
Diversification Opportunities for TrueShares Structured and First Trust
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between TrueShares and First is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding TrueShares Structured Outcome and First Trust Cboe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Cboe and TrueShares Structured 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 TrueShares Structured Outcome 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 Cboe has no effect on the direction of TrueShares Structured i.e., TrueShares Structured and First Trust go up and down completely randomly.
Pair Corralation between TrueShares Structured and First Trust
Given the investment horizon of 90 days TrueShares Structured Outcome is expected to generate 1.51 times more return on investment than First Trust. However, TrueShares Structured is 1.51 times more volatile than First Trust Cboe. It trades about 0.14 of its potential returns per unit of risk. First Trust Cboe is currently generating about 0.16 per unit of risk. If you would invest 2,774 in TrueShares Structured Outcome on September 14, 2024 and sell it today you would earn a total of 585.00 from holding TrueShares Structured Outcome or generate 21.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
TrueShares Structured Outcome vs. First Trust Cboe
Performance |
| Timeline |
| TrueShares Structured |
| First Trust Cboe |
TrueShares Structured and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TrueShares Structured and First Trust
The main advantage of trading using opposite TrueShares Structured and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TrueShares Structured 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.| TrueShares Structured vs. First Trust Cboe | TrueShares Structured vs. FT Cboe Vest | TrueShares Structured vs. Innovator SP 500 | TrueShares Structured vs. Innovator SP 500 |
| First Trust vs. FT Cboe Vest | First Trust vs. First Trust Exchange Traded | First Trust vs. FT Cboe Vest | First Trust vs. FT Cboe Vest |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stocks Directory Find actively traded stocks across global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |