Correlation Between First Trust and SPDR Bloomberg

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

By analyzing existing cross correlation between First Trust Enhanced and SPDR Bloomberg 1 3, you can compare the effects of market volatilities on First Trust and SPDR Bloomberg 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 SPDR Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and SPDR Bloomberg.

Diversification Opportunities for First Trust and SPDR Bloomberg

0.99

Correlation Coefficient

First Trust  SPDR Bloomberg

No risk reduction

The 3 months correlation between First and SPDR is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Enhanced and SPDR Bloomberg 1 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg 1 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 Enhanced are associated (or correlated) with SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg 1 has no effect on the direction of First Trust i.e., First Trust and SPDR Bloomberg go up and down completely randomly.

Pair Corralation between First Trust and SPDR Bloomberg

Given the investment horizon of 90 days First Trust is expected to generate 1.41 times less return on investment than SPDR Bloomberg. In addition to that, First Trust is 4.21 times more volatile than SPDR Bloomberg 1 3. It trades about 0.2 of its total potential returns per unit of risk. SPDR Bloomberg 1 3 is currently generating about 1.21 per unit of volatility. If you would invest  9,084  in SPDR Bloomberg 1 3 on May 3, 2025 and sell it today you would earn a total of  91.00  from holding SPDR Bloomberg 1 3 or generate 1.0% 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 Enhanced  vs.  SPDR Bloomberg 1 3

First Trust Enhanced

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Enhanced are ranked lower than 16 (%) 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 newest stock price disarray, may contribute to short-term losses for the investors.

SPDR Bloomberg 1

Risk-Adjusted Performance

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Bloomberg 1 3 are ranked lower than 95 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward indicators, SPDR Bloomberg is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with First Trust and SPDR Bloomberg

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

The idea behind First Trust Enhanced and SPDR Bloomberg 1 3 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.