Correlation Between First Trust and VanEck Crypto
Can any of the company-specific risk be diversified away by investing in both First Trust and VanEck Crypto 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 VanEck Crypto 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 VanEck Crypto Blockchain, you can compare the effects of market volatilities on First Trust and VanEck Crypto 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 VanEck Crypto. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and VanEck Crypto.
Diversification Opportunities for First Trust and VanEck Crypto
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and VanEck is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Nasdaq and VanEck Crypto Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Crypto Blockchain 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 VanEck Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Crypto Blockchain has no effect on the direction of First Trust i.e., First Trust and VanEck Crypto go up and down completely randomly.
Pair Corralation between First Trust and VanEck Crypto
Assuming the 90 days trading horizon First Trust is expected to generate 8.35 times less return on investment than VanEck Crypto. But when comparing it to its historical volatility, First Trust Nasdaq is 2.83 times less risky than VanEck Crypto. It trades about 0.08 of its potential returns per unit of risk. VanEck Crypto Blockchain is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 988.00 in VanEck Crypto Blockchain on August 28, 2024 and sell it today you would earn a total of 284.00 from holding VanEck Crypto Blockchain or generate 28.74% 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. VanEck Crypto Blockchain
Performance |
| Timeline |
| First Trust Nasdaq |
| VanEck Crypto Blockchain |
First Trust and VanEck Crypto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and VanEck Crypto
The main advantage of trading using opposite First Trust and VanEck Crypto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, VanEck Crypto 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 VanEck Crypto will offset losses from the drop in VanEck Crypto's long position.| First Trust vs. First Trust Large | First Trust vs. First Trust Capital | First Trust vs. First Trust Nasdaq | First Trust vs. First Trust Eurozone |
| VanEck Crypto vs. VanEck Morningstar SMID | VanEck Crypto vs. VanEck New China | VanEck Crypto vs. VanEck Hydrogen Economy | VanEck Crypto vs. VanEck Semiconductor UCITS |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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