Correlation Between First Trust and First Trust
Can any of the company-specific risk be diversified away by investing in both First Trust 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 First Trust and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Multi Strategy and First Trust Managed, you can compare the effects of market volatilities on First Trust 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 First Trust with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and First Trust.
Diversification Opportunities for First Trust and First Trust
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and First is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Multi Strategy and First Trust Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Managed 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 Multi Strategy 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 Managed has no effect on the direction of First Trust i.e., First Trust and First Trust go up and down completely randomly.
Pair Corralation between First Trust and First Trust
Assuming the 90 days horizon First Trust Multi Strategy is expected to generate 0.94 times more return on investment than First Trust. However, First Trust Multi Strategy is 1.06 times less risky than First Trust. It trades about 0.42 of its potential returns per unit of risk. First Trust Managed is currently generating about 0.02 per unit of risk. If you would invest 2,372 in First Trust Multi Strategy on April 25, 2025 and sell it today you would earn a total of 83.00 from holding First Trust Multi Strategy or generate 3.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
First Trust Multi Strategy vs. First Trust Managed
Performance |
Timeline |
First Trust Multi |
First Trust Managed |
First Trust and First Trust Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Trust and First Trust
The main advantage of trading using opposite First Trust and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust 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.First Trust vs. Precious Metals And | First Trust vs. First Eagle Gold | First Trust vs. Sprott Gold Equity | First Trust vs. Global Gold Fund |
First Trust vs. Shelton E Value | First Trust vs. Nova Fund Class | First Trust vs. Ab E Opportunities | First Trust vs. Ab Value Fund |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |