Correlation Between VanEck Short and First Trust
Can any of the company-specific risk be diversified away by investing in both VanEck Short 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 VanEck Short and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Short Muni and First Trust Flexible, you can compare the effects of market volatilities on VanEck Short 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 VanEck Short with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Short and First Trust.
Diversification Opportunities for VanEck Short and First Trust
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VanEck and First is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Short Muni and First Trust Flexible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Flexible and VanEck Short 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 VanEck Short Muni 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 Flexible has no effect on the direction of VanEck Short i.e., VanEck Short and First Trust go up and down completely randomly.
Pair Corralation between VanEck Short and First Trust
Considering the 90-day investment horizon VanEck Short is expected to generate 2.53 times less return on investment than First Trust. But when comparing it to its historical volatility, VanEck Short Muni is 5.04 times less risky than First Trust. It trades about 0.08 of its potential returns per unit of risk. First Trust Flexible is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,527 in First Trust Flexible on September 3, 2024 and sell it today you would earn a total of 216.00 from holding First Trust Flexible or generate 14.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Short Muni vs. First Trust Flexible
Performance |
| Timeline |
| VanEck Short Muni |
| First Trust Flexible |
VanEck Short and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Short and First Trust
The main advantage of trading using opposite VanEck Short and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Short 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.| VanEck Short vs. SSGA Active Trust | VanEck Short vs. SPDR Nuveen Municipal | VanEck Short vs. iShares Short Maturity | VanEck Short vs. First Trust Flexible |
| First Trust vs. Fundamental Income Net | First Trust vs. TTM Technologies | First Trust vs. DXP Enterprises | First Trust vs. Citi Trends |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |