Correlation Between First Trust and Hanlon Tactical

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

By analyzing existing cross correlation between First Trust Specialty and Hanlon Tactical Dividend, you can compare the effects of market volatilities on First Trust and Hanlon Tactical 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 Hanlon Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Hanlon Tactical.

Diversification Opportunities for First Trust and Hanlon Tactical

0.79

Correlation Coefficient

First Trust  Hanlon Tactical

Poor diversification

The 3 months correlation between First and Hanlon is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Specialty and Hanlon Tactical Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanlon Tactical Dividend 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 Specialty are associated (or correlated) with Hanlon Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanlon Tactical Dividend has no effect on the direction of First Trust i.e., First Trust and Hanlon Tactical go up and down completely randomly.

Pair Corralation between First Trust and Hanlon Tactical

Considering the 90-day investment horizon First Trust Specialty is expected to generate 1.59 times more return on investment than Hanlon Tactical. However, First Trust is 1.59 times more volatile than Hanlon Tactical Dividend. It trades about 0.13 of its potential returns per unit of risk. Hanlon Tactical Dividend is currently generating about 0.11 per unit of risk. If you would invest  280.00  in First Trust Specialty on October 6, 2024 and sell it today you would earn a total of  156.00  from holding First Trust Specialty or generate 55.71% return on investment over 90 days.

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

First Trust Specialty  vs.  Hanlon Tactical Dividend

First Trust Specialty

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Specialty are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unsteady technical and fundamental indicators, First Trust may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Hanlon Tactical Dividend

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hanlon Tactical Dividend are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Hanlon Tactical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with First Trust and Hanlon Tactical

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

The idea behind First Trust Specialty and Hanlon Tactical Dividend 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.