Correlation Between First Trust and ARK Autonomous
Can any of the company-specific risk be diversified away by investing in both First Trust and ARK Autonomous 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 ARK Autonomous into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust NASDAQ and ARK Autonomous Technology, you can compare the effects of market volatilities on First Trust and ARK Autonomous 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 ARK Autonomous. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and ARK Autonomous.
Diversification Opportunities for First Trust and ARK Autonomous
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and ARK is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding First Trust NASDAQ and ARK Autonomous Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARK Autonomous Technology 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 NASDAQ are associated (or correlated) with ARK Autonomous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARK Autonomous Technology has no effect on the direction of First Trust i.e., First Trust and ARK Autonomous go up and down completely randomly.
Pair Corralation between First Trust and ARK Autonomous
Given the investment horizon of 90 days First Trust NASDAQ is expected to under-perform the ARK Autonomous. In addition to that, First Trust is 1.34 times more volatile than ARK Autonomous Technology. It trades about -0.03 of its total potential returns per unit of risk. ARK Autonomous Technology is currently generating about 0.07 per unit of volatility. If you would invest 4,412 in ARK Autonomous Technology on August 27, 2024 and sell it today you would earn a total of 2,904 from holding ARK Autonomous Technology or generate 65.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust NASDAQ vs. ARK Autonomous Technology
Performance |
| Timeline |
| First Trust NASDAQ |
| ARK Autonomous Technology |
First Trust and ARK Autonomous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and ARK Autonomous
The main advantage of trading using opposite First Trust and ARK Autonomous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, ARK Autonomous 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 ARK Autonomous will offset losses from the drop in ARK Autonomous' long position.| First Trust vs. ARK Autonomous Technology | First Trust vs. First Trust S Network | First Trust vs. FT Vest Equity | First Trust vs. Zillow Group Class |
| ARK Autonomous vs. Invesco DWA Utilities | ARK Autonomous vs. Invesco Dynamic Large | ARK Autonomous vs. Invesco Dynamic Large | ARK Autonomous vs. HUMANA INC |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |