Correlation Between First Trust and Perella Weinberg
Can any of the company-specific risk be diversified away by investing in both First Trust and Perella Weinberg 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 Perella Weinberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust NASDAQ 100 and Perella Weinberg Partners, you can compare the effects of market volatilities on First Trust and Perella Weinberg 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 Perella Weinberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Perella Weinberg.
Diversification Opportunities for First Trust and Perella Weinberg
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Perella is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding First Trust NASDAQ 100 and Perella Weinberg Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perella Weinberg Partners 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 100 are associated (or correlated) with Perella Weinberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perella Weinberg Partners has no effect on the direction of First Trust i.e., First Trust and Perella Weinberg go up and down completely randomly.
Pair Corralation between First Trust and Perella Weinberg
Given the investment horizon of 90 days First Trust is expected to generate 5.6 times less return on investment than Perella Weinberg. But when comparing it to its historical volatility, First Trust NASDAQ 100 is 4.07 times less risky than Perella Weinberg. It trades about 0.17 of its potential returns per unit of risk. Perella Weinberg Partners is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,076 in Perella Weinberg Partners on August 29, 2024 and sell it today you would earn a total of 483.00 from holding Perella Weinberg Partners or generate 23.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust NASDAQ 100 vs. Perella Weinberg Partners
Performance |
| Timeline |
| First Trust NASDAQ |
| Perella Weinberg Partners |
First Trust and Perella Weinberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Perella Weinberg
The main advantage of trading using opposite First Trust and Perella Weinberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Perella Weinberg 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 Perella Weinberg will offset losses from the drop in Perella Weinberg's long position.| First Trust vs. First Trust NASDAQ 100 | First Trust vs. First Trust NASDAQ 100 Technology | First Trust vs. Direxion NASDAQ 100 Equal | First Trust vs. First Trust Large |
| Perella Weinberg vs. Evercore Partners | Perella Weinberg vs. Lazard | Perella Weinberg vs. Piper Sandler Companies | Perella Weinberg vs. Moelis Co |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |