Correlation Between FT Vest and New York

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

By analyzing existing cross correlation between FT Vest Equity and New York City, you can compare the effects of market volatilities on FT Vest and New York 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 FT Vest with a short position of New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Vest and New York.

Diversification Opportunities for FT Vest and New York

0.33

Correlation Coefficient

FT Vest  New York

Weak diversification

The 3 months correlation between DHDG and New is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding FT Vest Equity and New York City in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York City and FT Vest 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 FT Vest Equity are associated (or correlated) with New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York City has no effect on the direction of FT Vest i.e., FT Vest and New York go up and down completely randomly.

Pair Corralation between FT Vest and New York

Given the investment horizon of 90 days FT Vest Equity is expected to generate 0.15 times more return on investment than New York. However, FT Vest Equity is 6.57 times less risky than New York. It trades about 0.18 of its potential returns per unit of risk. New York City is currently generating about -0.05 per unit of risk. If you would invest  3,038  in FT Vest Equity on September 3, 2024 and sell it today you would earn a total of  65.00  from holding FT Vest Equity or generate 2.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	46.88%
Values	Daily Returns

FT Vest Equity  vs.  New York City

FT Vest Equity

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FT Vest Equity are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, FT Vest is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

New York City

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New York City has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Etf's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with FT Vest and New York

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

The idea behind FT Vest Equity and New York City 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.