Correlation Between First Trust and IREIT MarketVector

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

By analyzing existing cross correlation between First Trust Exchange Traded and iREIT MarketVector, you can compare the effects of market volatilities on First Trust and IREIT MarketVector 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 IREIT MarketVector. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and IREIT MarketVector.

Diversification Opportunities for First Trust and IREIT MarketVector

0.65

Correlation Coefficient

First Trust  IREIT MarketVector

Poor diversification

The 3 months correlation between First and IREIT is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Exchange Traded and iREIT MarketVector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iREIT MarketVector 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 Exchange Traded are associated (or correlated) with IREIT MarketVector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iREIT MarketVector has no effect on the direction of First Trust i.e., First Trust and IREIT MarketVector go up and down completely randomly.

Pair Corralation between First Trust and IREIT MarketVector

Given the investment horizon of 90 days First Trust is expected to generate 1.86 times less return on investment than IREIT MarketVector. But when comparing it to its historical volatility, First Trust Exchange Traded is 1.09 times less risky than IREIT MarketVector. It trades about 0.07 of its potential returns per unit of risk. iREIT MarketVector is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,781  in iREIT MarketVector on April 30, 2025 and sell it today you would earn a total of  145.00  from holding iREIT MarketVector or generate 8.14% return on investment over 90 days.

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

First Trust Exchange Traded  vs.  iREIT MarketVector

First Trust Exchange

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Exchange Traded are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable technical and fundamental indicators, First Trust is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

iREIT MarketVector

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iREIT MarketVector are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, IREIT MarketVector may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with First Trust and IREIT MarketVector

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

The idea behind First Trust Exchange Traded and iREIT MarketVector 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.