Correlation Between Primecap Odyssey and First Trust

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

By analyzing existing cross correlation between Primecap Odyssey Stock and First Trust NASDAQ 100, you can compare the effects of market volatilities on Primecap Odyssey 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 Primecap Odyssey with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primecap Odyssey and First Trust.

Diversification Opportunities for Primecap Odyssey and First Trust

-0.13

Correlation Coefficient

Primecap Odyssey  First Trust

Good diversification

The 3 months correlation between Primecap and First is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Primecap Odyssey Stock and First Trust NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust NASDAQ and Primecap Odyssey 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 Primecap Odyssey Stock 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 NASDAQ has no effect on the direction of Primecap Odyssey i.e., Primecap Odyssey and First Trust go up and down completely randomly.

Pair Corralation between Primecap Odyssey and First Trust

Assuming the 90 days horizon Primecap Odyssey Stock is expected to generate 1.21 times more return on investment than First Trust. However, Primecap Odyssey is 1.21 times more volatile than First Trust NASDAQ 100. It trades about 0.19 of its potential returns per unit of risk. First Trust NASDAQ 100 is currently generating about 0.02 per unit of risk. If you would invest  3,657  in Primecap Odyssey Stock on July 6, 2025 and sell it today you would earn a total of  349.00  from holding Primecap Odyssey Stock or generate 9.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Primecap Odyssey Stock  vs.  First Trust NASDAQ 100

Primecap Odyssey Stock

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Primecap Odyssey Stock are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Primecap Odyssey may actually be approaching a critical reversion point that can send shares even higher in November 2025.

First Trust NASDAQ

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust NASDAQ 100 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, First Trust is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Primecap Odyssey and First Trust

The main advantage of trading using opposite Primecap Odyssey and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primecap Odyssey 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 Primecap Odyssey Stock and First Trust NASDAQ 100 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.