Correlation Between First Trust and ClearShares Ultra

Can any of the company-specific risk be diversified away by investing in both First Trust and ClearShares Ultra 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 ClearShares Ultra 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 ClearShares Ultra Short Maturity, you can compare the effects of market volatilities on First Trust and ClearShares Ultra 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 ClearShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and ClearShares Ultra.

Diversification Opportunities for First Trust and ClearShares Ultra

0.91

Correlation Coefficient

First Trust  ClearShares Ultra

Almost no diversification

The 3 months correlation between First and ClearShares is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Enhanced and ClearShares Ultra Short Maturi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearShares Ultra Short 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 ClearShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearShares Ultra Short has no effect on the direction of First Trust i.e., First Trust and ClearShares Ultra go up and down completely randomly.

Pair Corralation between First Trust and ClearShares Ultra

Given the investment horizon of 90 days First Trust Enhanced is expected to generate 2.23 times more return on investment than ClearShares Ultra. However, First Trust is 2.23 times more volatile than ClearShares Ultra Short Maturity. It trades about 0.6 of its potential returns per unit of risk. ClearShares Ultra Short Maturity is currently generating about 1.15 per unit of risk. If you would invest  5,921  in First Trust Enhanced on July 6, 2025 and sell it today you would earn a total of  76.00  from holding First Trust Enhanced or generate 1.28% 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.  ClearShares Ultra Short Maturi

First Trust Enhanced

Risk-Adjusted Performance

Prime

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Enhanced are ranked lower than 47 (%) 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.

ClearShares Ultra Short

Risk-Adjusted Performance

Elite

Compared to the overall equity markets, risk-adjusted returns on investments in ClearShares Ultra Short Maturity are ranked lower than 90 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, ClearShares Ultra is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with First Trust and ClearShares Ultra

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

The idea behind First Trust Enhanced and ClearShares Ultra Short Maturity 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 Commodity Directory module to find actively traded commodities issued by global exchanges.