Correlation Between First Trust and NORFOLK
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By analyzing existing cross correlation between First Trust Exchange Traded and NORFOLK SOUTHN P, you can compare the effects of market volatilities on First Trust and NORFOLK 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 NORFOLK. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and NORFOLK.
Diversification Opportunities for First Trust and NORFOLK
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and NORFOLK is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Exchange Traded and NORFOLK SOUTHN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORFOLK SOUTHN P 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 NORFOLK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORFOLK SOUTHN P has no effect on the direction of First Trust i.e., First Trust and NORFOLK go up and down completely randomly.
Pair Corralation between First Trust and NORFOLK
Given the investment horizon of 90 days First Trust Exchange Traded is expected to generate 2.48 times more return on investment than NORFOLK. However, First Trust is 2.48 times more volatile than NORFOLK SOUTHN P. It trades about 0.12 of its potential returns per unit of risk. NORFOLK SOUTHN P is currently generating about -0.1 per unit of risk. If you would invest 2,685 in First Trust Exchange Traded on September 23, 2024 and sell it today you would earn a total of 135.00 from holding First Trust Exchange Traded or generate 5.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.46% |
Values | Daily Returns |
First Trust Exchange Traded vs. NORFOLK SOUTHN P
Performance |
Timeline |
First Trust Exchange |
NORFOLK SOUTHN P |
First Trust and NORFOLK Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Trust and NORFOLK
The main advantage of trading using opposite First Trust and NORFOLK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, NORFOLK 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 NORFOLK will offset losses from the drop in NORFOLK's long position.First Trust vs. First Trust Exchange Traded | First Trust vs. First Trust Exchange Traded | First Trust vs. FT Cboe Vest | First Trust vs. FT Cboe Vest |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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