Correlation Between First Trust and Flaherty Crumrine

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

By analyzing existing cross correlation between First Trust Intermediate and Flaherty Crumrine Preferred, you can compare the effects of market volatilities on First Trust and Flaherty Crumrine 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 Flaherty Crumrine. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Flaherty Crumrine.

Diversification Opportunities for First Trust and Flaherty Crumrine

0.97

Correlation Coefficient

First Trust  Flaherty Crumrine

Almost no diversification

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

Pair Corralation between First Trust and Flaherty Crumrine

Considering the 90-day investment horizon First Trust Intermediate is expected to generate 0.78 times more return on investment than Flaherty Crumrine. However, First Trust Intermediate is 1.29 times less risky than Flaherty Crumrine. It trades about 0.27 of its potential returns per unit of risk. Flaherty Crumrine Preferred is currently generating about 0.18 per unit of risk. If you would invest  1,760  in First Trust Intermediate on May 13, 2025 and sell it today you would earn a total of  127.00  from holding First Trust Intermediate or generate 7.22% 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 Intermediate  vs.  Flaherty Crumrine Preferred

First Trust Intermediate

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Intermediate are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly weak basic indicators, First Trust may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Flaherty Crumrine

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flaherty Crumrine Preferred are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, Flaherty Crumrine is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with First Trust and Flaherty Crumrine

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

The idea behind First Trust Intermediate and Flaherty Crumrine Preferred 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.