Correlation Between First Trust and 2x Long

Can any of the company-specific risk be diversified away by investing in both First Trust and 2x Long 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 2x Long into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Trust Exchange and 2x Long VIX, you can compare the effects of market volatilities on First Trust and 2x Long 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 2x Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and 2x Long.

Diversification Opportunities for First Trust and 2x Long

-0.74

Correlation Coefficient

First Trust  2x Long

Pay attention - limited upside

The 3 months correlation between First and UVIX is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Exchange and 2x Long VIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2x Long VIX 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 are associated (or correlated) with 2x Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2x Long VIX has no effect on the direction of First Trust i.e., First Trust and 2x Long go up and down completely randomly.

Pair Corralation between First Trust and 2x Long

Given the investment horizon of 90 days First Trust Exchange is expected to generate 0.08 times more return on investment than 2x Long. However, First Trust Exchange is 12.13 times less risky than 2x Long. It trades about 0.08 of its potential returns per unit of risk. 2x Long VIX is currently generating about -0.01 per unit of risk. If you would invest  2,339  in First Trust Exchange on August 22, 2025 and sell it today you would earn a total of  790.00  from holding First Trust Exchange or generate 33.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

First Trust Exchange  vs.  2x Long VIX

First Trust Exchange

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Exchange are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, First Trust is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

2x Long VIX

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 2x Long VIX are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent forward indicators, 2x Long may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with First Trust and 2x Long

The main advantage of trading using opposite First Trust and 2x Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, 2x Long 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 2x Long will offset losses from the drop in 2x Long's long position.

The idea behind First Trust Exchange and 2x Long VIX 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.