Correlation Between Lattice Strategies and First Trust

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

By analyzing existing cross correlation between Lattice Strategies Trust and First Trust SP, you can compare the effects of market volatilities on Lattice Strategies 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 Lattice Strategies with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lattice Strategies and First Trust.

Diversification Opportunities for Lattice Strategies and First Trust

0.08

Correlation Coefficient

Lattice Strategies  First Trust

Significant diversification

The 3 months correlation between Lattice and First is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Lattice Strategies Trust and First Trust SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust SP and Lattice Strategies 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 Lattice Strategies Trust 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 SP has no effect on the direction of Lattice Strategies i.e., Lattice Strategies and First Trust go up and down completely randomly.

Pair Corralation between Lattice Strategies and First Trust

Given the investment horizon of 90 days Lattice Strategies Trust is expected to generate 0.92 times more return on investment than First Trust. However, Lattice Strategies Trust is 1.09 times less risky than First Trust. It trades about 0.13 of its potential returns per unit of risk. First Trust SP is currently generating about 0.05 per unit of risk. If you would invest  6,261  in Lattice Strategies Trust on October 10, 2025 and sell it today you would earn a total of  343.00  from holding Lattice Strategies Trust or generate 5.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lattice Strategies Trust  vs.  First Trust SP

Lattice Strategies Trust

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Lattice Strategies Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Lattice Strategies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

First Trust SP

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust SP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, First Trust is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Lattice Strategies and First Trust

The main advantage of trading using opposite Lattice Strategies and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lattice Strategies 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.

The idea behind Lattice Strategies Trust and First Trust SP 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.