Correlation Between First Trust and Anydrus Advantage
Can any of the company-specific risk be diversified away by investing in both First Trust and Anydrus Advantage 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 Anydrus Advantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Exchange Traded and Anydrus Advantage ETF, you can compare the effects of market volatilities on First Trust and Anydrus Advantage 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 Anydrus Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Anydrus Advantage.
Diversification Opportunities for First Trust and Anydrus Advantage
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Anydrus is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Exchange Traded and Anydrus Advantage ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anydrus Advantage ETF 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 Exchange Traded are associated (or correlated) with Anydrus Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anydrus Advantage ETF has no effect on the direction of First Trust i.e., First Trust and Anydrus Advantage go up and down completely randomly.
Pair Corralation between First Trust and Anydrus Advantage
Given the investment horizon of 90 days First Trust Exchange Traded is expected to under-perform the Anydrus Advantage. But the etf apears to be less risky and, when comparing its historical volatility, First Trust Exchange Traded is 1.15 times less risky than Anydrus Advantage. The etf trades about -0.04 of its potential returns per unit of risk. The Anydrus Advantage ETF is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,428 in Anydrus Advantage ETF on November 3, 2024 and sell it today you would earn a total of 54.00 from holding Anydrus Advantage ETF or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
First Trust Exchange Traded vs. Anydrus Advantage ETF
Performance |
| Timeline |
| First Trust Exchange |
| Anydrus Advantage ETF |
First Trust and Anydrus Advantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Anydrus Advantage
The main advantage of trading using opposite First Trust and Anydrus Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Anydrus Advantage 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 Anydrus Advantage will offset losses from the drop in Anydrus Advantage's long position.| First Trust vs. MFS Active Exchange | First Trust vs. Vanguard Intermediate Term Treasury | First Trust vs. Vanguard Long Term Treasury | First Trust vs. Vanguard Short Term Treasury |
| Anydrus Advantage vs. MFS Active Exchange | Anydrus Advantage vs. First Trust Exchange Traded | Anydrus Advantage vs. Vanguard Intermediate Term Treasury | Anydrus Advantage vs. Vanguard Long Term Treasury |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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