Correlation Between SITE Centers and First Trust
Can any of the company-specific risk be diversified away by investing in both SITE Centers 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 SITE Centers and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SITE Centers Corp and First Trust Senior, you can compare the effects of market volatilities on SITE Centers 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 SITE Centers with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of SITE Centers and First Trust.
Diversification Opportunities for SITE Centers and First Trust
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SITE and First is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SITE Centers Corp and First Trust Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Senior and SITE Centers 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 SITE Centers Corp 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 Senior has no effect on the direction of SITE Centers i.e., SITE Centers and First Trust go up and down completely randomly.
Pair Corralation between SITE Centers and First Trust
Assuming the 90 days trading horizon SITE Centers is expected to generate 27.57 times less return on investment than First Trust. But when comparing it to its historical volatility, SITE Centers Corp is 6.43 times less risky than First Trust. It trades about 0.07 of its potential returns per unit of risk. First Trust Senior is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,011 in First Trust Senior on September 5, 2024 and sell it today you would earn a total of 29.00 from holding First Trust Senior or generate 2.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.27% |
| Values | Daily Returns |
SITE Centers Corp vs. First Trust Senior
Performance |
| Timeline |
| SITE Centers Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| First Trust Senior |
SITE Centers and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SITE Centers and First Trust
The main advantage of trading using opposite SITE Centers and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SITE Centers 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.| SITE Centers vs. The Gabelli Multimedia | SITE Centers vs. The Gabelli Equity | SITE Centers vs. Virtus AllianzGI Convertible | SITE Centers vs. John Hancock Income |
| First Trust vs. Blackstone Gso Long | First Trust vs. Eaton Vance Senior | First Trust vs. Western Asset Global | First Trust vs. Western Asset Global |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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