Correlation Between First Trust and Purpose Multi

Can any of the company-specific risk be diversified away by investing in both First Trust and Purpose Multi 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 Purpose Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Trust Global and Purpose Multi Strategy Market, you can compare the effects of market volatilities on First Trust and Purpose Multi 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 Purpose Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Purpose Multi.

Diversification Opportunities for First Trust and Purpose Multi

0.97

Correlation Coefficient

First Trust  Purpose Multi

Almost no diversification

The 3 months correlation between First and Purpose is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Global and Purpose Multi Strategy Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purpose Multi Strategy 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 Global are associated (or correlated) with Purpose Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purpose Multi Strategy has no effect on the direction of First Trust i.e., First Trust and Purpose Multi go up and down completely randomly.

Pair Corralation between First Trust and Purpose Multi

Assuming the 90 days trading horizon First Trust is expected to generate 2.41 times less return on investment than Purpose Multi. But when comparing it to its historical volatility, First Trust Global is 3.5 times less risky than Purpose Multi. It trades about 0.3 of its potential returns per unit of risk. Purpose Multi Strategy Market is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  2,478  in Purpose Multi Strategy Market on July 29, 2025 and sell it today you would earn a total of  218.00  from holding Purpose Multi Strategy Market or generate 8.8% 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 Global  vs.  Purpose Multi Strategy Market

First Trust Global

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Global are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, First Trust is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Purpose Multi Strategy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Purpose Multi Strategy Market are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Purpose Multi may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with First Trust and Purpose Multi

The main advantage of trading using opposite First Trust and Purpose Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Purpose Multi 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 Purpose Multi will offset losses from the drop in Purpose Multi's long position.

The idea behind First Trust Global and Purpose Multi Strategy Market 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.