Correlation Between First Trust and 251566AA3
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By analyzing existing cross correlation between First Trust Exchange Traded and DT 3625 21 JAN 50, you can compare the effects of market volatilities on First Trust and 251566AA3 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 251566AA3. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and 251566AA3.
Diversification Opportunities for First Trust and 251566AA3
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and 251566AA3 is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Exchange Traded and DT 3625 21 JAN 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DT 3625 21 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 251566AA3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DT 3625 21 has no effect on the direction of First Trust i.e., First Trust and 251566AA3 go up and down completely randomly.
Pair Corralation between First Trust and 251566AA3
Given the investment horizon of 90 days First Trust is expected to generate 2.62 times less return on investment than 251566AA3. But when comparing it to its historical volatility, First Trust Exchange Traded is 3.48 times less risky than 251566AA3. It trades about 0.12 of its potential returns per unit of risk. DT 3625 21 JAN 50 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7,757 in DT 3625 21 JAN 50 on September 22, 2024 and sell it today you would earn a total of 611.00 from holding DT 3625 21 JAN 50 or generate 7.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 64.62% |
| Values | Daily Returns |
First Trust Exchange Traded vs. DT 3625 21 JAN 50
Performance |
| Timeline |
| First Trust Exchange |
| DT 3625 21 |
First Trust and 251566AA3 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and 251566AA3
The main advantage of trading using opposite First Trust and 251566AA3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, 251566AA3 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 251566AA3 will offset losses from the drop in 251566AA3's long position.| First Trust vs. First Trust Exchange Traded | First Trust vs. First Trust Exchange Traded | First Trust vs. FT Cboe Vest | First Trust vs. FT Cboe Vest |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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