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 Dorsey, 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
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barclays and First is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and First Trust Dorsey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Dorsey 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 Dorsey 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
If you would invest 7,362 in Barclays Capital on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Barclays Capital or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 2.38% |
| Values | Daily Returns |
Barclays Capital vs. First Trust Dorsey
Performance |
| Timeline |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Trust Dorsey |
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.| Barclays Capital vs. Aquagold International | Barclays Capital vs. Morningstar Unconstrained Allocation | Barclays Capital vs. High Yield Municipal Fund | Barclays Capital vs. Thrivent High Yield |
| First Trust vs. First Trust Dorsey | First Trust vs. First Trust Emerging | First Trust vs. First Trust Dorsey | First Trust vs. First Trust Developed |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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