Correlation Between First Trust and AirBoss Of

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

By analyzing existing cross correlation between First Trust S Network and AirBoss of America, you can compare the effects of market volatilities on First Trust and AirBoss Of 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 AirBoss Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and AirBoss Of.

Diversification Opportunities for First Trust and AirBoss Of

-0.75

Correlation Coefficient

First Trust  AirBoss Of

Pay attention - limited upside

The 3 months correlation between First and AirBoss is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding First Trust S Network and AirBoss of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AirBoss of America 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 S Network are associated (or correlated) with AirBoss Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AirBoss of America has no effect on the direction of First Trust i.e., First Trust and AirBoss Of go up and down completely randomly.

Pair Corralation between First Trust and AirBoss Of

Given the investment horizon of 90 days First Trust is expected to generate 9.03 times less return on investment than AirBoss Of. But when comparing it to its historical volatility, First Trust S Network is 2.8 times less risky than AirBoss Of. It trades about 0.03 of its potential returns per unit of risk. AirBoss of America is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  262.00  in AirBoss of America on October 27, 2024 and sell it today you would earn a total of  12.00  from holding AirBoss of America or generate 4.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

First Trust S Network  vs.  AirBoss of America

First Trust S

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust S Network are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, First Trust may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AirBoss of America

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AirBoss of America has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with First Trust and AirBoss Of

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

The idea behind First Trust S Network and AirBoss of America 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.