Correlation Between First Trust and OAIE
Can any of the company-specific risk be diversified away by investing in both First Trust and OAIE 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 OAIE 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 OAIE, you can compare the effects of market volatilities on First Trust and OAIE 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 OAIE. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and OAIE.
Diversification Opportunities for First Trust and OAIE
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and OAIE is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Exchange Traded and OAIE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAIE 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 OAIE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAIE has no effect on the direction of First Trust i.e., First Trust and OAIE go up and down completely randomly.
Pair Corralation between First Trust and OAIE
If you would invest 2,667 in First Trust Exchange Traded on September 1, 2024 and sell it today you would earn a total of 403.00 from holding First Trust Exchange Traded or generate 15.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
First Trust Exchange Traded vs. OAIE
Performance |
| Timeline |
| First Trust Exchange |
| OAIE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Trust and OAIE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and OAIE
The main advantage of trading using opposite First Trust and OAIE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, OAIE 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 OAIE will offset losses from the drop in OAIE's long position.| First Trust vs. American Century Quality | First Trust vs. T Rowe Price | First Trust vs. ClearBridge Large Cap | First Trust vs. Sterling Capital Focus |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |