Correlation Between First Trust and ABIVAX Socit

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

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

Diversification Opportunities for First Trust and ABIVAX Socit

-0.1

Correlation Coefficient

First Trust  ABIVAX Socit

Good diversification

The 3 months correlation between First and ABIVAX is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Exchange Traded and ABIVAX Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABIVAX Socit Anonyme 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 ABIVAX Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABIVAX Socit Anonyme has no effect on the direction of First Trust i.e., First Trust and ABIVAX Socit go up and down completely randomly.

Pair Corralation between First Trust and ABIVAX Socit

Given the investment horizon of 90 days First Trust Exchange Traded is expected to under-perform the ABIVAX Socit. But the etf apears to be less risky and, when comparing its historical volatility, First Trust Exchange Traded is 7.32 times less risky than ABIVAX Socit. The etf trades about -0.11 of its potential returns per unit of risk. The ABIVAX Socit Anonyme is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  737.00  in ABIVAX Socit Anonyme on December 29, 2024 and sell it today you would lose (46.00) from holding ABIVAX Socit Anonyme or give up 6.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

First Trust Exchange Traded  vs.  ABIVAX Socit Anonyme

First Trust Exchange

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Trust Exchange Traded has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, First Trust is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

ABIVAX Socit Anonyme

Risk-Adjusted Performance

Very Weak

Over the last 90 days ABIVAX Socit Anonyme has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ABIVAX Socit is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with First Trust and ABIVAX Socit

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

The idea behind First Trust Exchange Traded and ABIVAX Socit Anonyme 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.