Correlation Between First Trust and DWAQ
Can any of the company-specific risk be diversified away by investing in both First Trust and DWAQ 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 DWAQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Large and DWAQ, you can compare the effects of market volatilities on First Trust and DWAQ 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 DWAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and DWAQ.
Diversification Opportunities for First Trust and DWAQ
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and DWAQ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Large and DWAQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DWAQ 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 Large are associated (or correlated) with DWAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DWAQ has no effect on the direction of First Trust i.e., First Trust and DWAQ go up and down completely randomly.
Pair Corralation between First Trust and DWAQ
If you would invest (100.00) in DWAQ on January 30, 2024 and sell it today you would earn a total of 100.00 from holding DWAQ or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
First Trust Large vs. DWAQ
Performance |
Timeline |
First Trust Large |
DWAQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Trust and DWAQ Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Trust and DWAQ
The main advantage of trading using opposite First Trust and DWAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, DWAQ 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 DWAQ will offset losses from the drop in DWAQ's long position.First Trust vs. ETF Opportunities Trust | First Trust vs. EA Series Trust | First Trust vs. HUMANA INC | First Trust vs. Aquagold International |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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