Correlation Between First Trust and Zacks Trust
Can any of the company-specific risk be diversified away by investing in both First Trust and Zacks 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 First Trust and Zacks Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Expanded and Zacks Trust , you can compare the effects of market volatilities on First Trust and Zacks 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 First Trust with a short position of Zacks Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Zacks Trust.
Diversification Opportunities for First Trust and Zacks Trust
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Zacks is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Expanded and Zacks Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zacks Trust 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 Expanded are associated (or correlated) with Zacks Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zacks Trust has no effect on the direction of First Trust i.e., First Trust and Zacks Trust go up and down completely randomly.
Pair Corralation between First Trust and Zacks Trust
Given the investment horizon of 90 days First Trust Expanded is expected to generate 1.79 times more return on investment than Zacks Trust. However, First Trust is 1.79 times more volatile than Zacks Trust . It trades about 0.1 of its potential returns per unit of risk. Zacks Trust is currently generating about 0.09 per unit of risk. If you would invest 1,727 in First Trust Expanded on September 3, 2024 and sell it today you would earn a total of 1,345 from holding First Trust Expanded or generate 77.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Expanded vs. Zacks Trust
Performance |
| Timeline |
| First Trust Expanded |
| Zacks Trust |
First Trust and Zacks Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Zacks Trust
The main advantage of trading using opposite First Trust and Zacks Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Zacks 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 Zacks Trust will offset losses from the drop in Zacks Trust's long position.| First Trust vs. First Trust Exchange Traded | First Trust vs. First Trust Exchange Traded | First Trust vs. First Trust Exchange Traded | First Trust vs. First Trust Exchange Traded |
| Zacks Trust vs. First Trust Expanded | Zacks Trust vs. First Trust Exchange Traded | Zacks Trust vs. First Trust Exchange Traded | Zacks Trust vs. Innovator Equity Accelerated |
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..
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |