Correlation Between Retireful and First Trust

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

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

Diversification Opportunities for Retireful and First Trust

0.12

Correlation Coefficient

Retireful  First Trust

Average diversification

The 3 months correlation between Retireful and First is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Retireful and First Trust Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Exchange and Retireful 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 Retireful 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 Exchange has no effect on the direction of Retireful i.e., Retireful and First Trust go up and down completely randomly.

Pair Corralation between Retireful and First Trust

If you would invest  3,058  in First Trust Exchange Traded on September 26, 2024 and sell it today you would earn a total of  45.00  from holding First Trust Exchange Traded or generate 1.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Retireful  vs.  First Trust Exchange Traded

Retireful

Risk-Adjusted Performance

0 of 100

Very Strong

Over the last 90 days Retireful has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical indicators, Retireful is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

First Trust Exchange

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Exchange Traded are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating essential indicators, First Trust may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Retireful and First Trust

The main advantage of trading using opposite Retireful and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retireful 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 Retireful and First Trust Exchange Traded 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.