Correlation Between Akros Monthly and First Trust
Can any of the company-specific risk be diversified away by investing in both Akros Monthly 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 Akros Monthly and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akros Monthly Payout and First Trust Dow, you can compare the effects of market volatilities on Akros Monthly 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 Akros Monthly with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akros Monthly and First Trust.
Diversification Opportunities for Akros Monthly and First Trust
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Akros and First is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Akros Monthly Payout and First Trust Dow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Dow and Akros Monthly 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 Akros Monthly Payout 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 Dow has no effect on the direction of Akros Monthly i.e., Akros Monthly and First Trust go up and down completely randomly.
Pair Corralation between Akros Monthly and First Trust
Given the investment horizon of 90 days Akros Monthly is expected to generate 1.39 times less return on investment than First Trust. But when comparing it to its historical volatility, Akros Monthly Payout is 2.54 times less risky than First Trust. It trades about 0.24 of its potential returns per unit of risk. First Trust Dow is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,772 in First Trust Dow on September 1, 2024 and sell it today you would earn a total of 121.00 from holding First Trust Dow or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Akros Monthly Payout vs. First Trust Dow
Performance |
| Timeline |
| Akros Monthly Payout |
| First Trust Dow |
Akros Monthly and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akros Monthly and First Trust
The main advantage of trading using opposite Akros Monthly and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akros Monthly 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.| Akros Monthly vs. iShares Core Growth | Akros Monthly vs. ClearShares OCIO ETF | Akros Monthly vs. Collaborative Investment Series | Akros Monthly vs. Northern Lights |
| First Trust vs. First Trust International | First Trust vs. Global X E commerce | First Trust vs. First Trust Nasdaq | First Trust vs. First Trust Nasdaq |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |