Correlation Between Barclays Capital and First Trust
Can any of the company-specific risk be diversified away by investing in both Barclays Capital 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 Barclays Capital and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays Capital and First Trust Latin, you can compare the effects of market volatilities on Barclays Capital 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 Barclays Capital with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and First Trust.
Diversification Opportunities for Barclays Capital and First Trust
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barclays and First is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and First Trust Latin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Latin and Barclays Capital 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 Barclays Capital 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 Latin has no effect on the direction of Barclays Capital i.e., Barclays Capital and First Trust go up and down completely randomly.
Pair Corralation between Barclays Capital and First Trust
Considering the 90-day investment horizon Barclays Capital is expected to generate 159.52 times more return on investment than First Trust. However, Barclays Capital is 159.52 times more volatile than First Trust Latin. It trades about 0.19 of its potential returns per unit of risk. First Trust Latin is currently generating about 0.02 per unit of risk. If you would invest 100.00 in Barclays Capital on September 13, 2024 and sell it today you would earn a total of 7,262 from holding Barclays Capital or generate 7262.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 30.3% |
| Values | Daily Returns |
Barclays Capital vs. First Trust Latin
Performance |
| Timeline |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Trust Latin |
Barclays Capital and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays Capital and First Trust
The main advantage of trading using opposite Barclays Capital and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital 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.The idea behind Barclays Capital and First Trust Latin pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| First Trust vs. iShares MSCI Mexico | First Trust vs. iShares MSCI Pacific | First Trust vs. iShares MSCI South | First Trust vs. iShares MSCI Brazil |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |