Correlation Between First Trust and Invesco Raymond

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

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

Diversification Opportunities for First Trust and Invesco Raymond

0.0

Correlation Coefficient

First Trust  Invesco Raymond

Pay attention - limited upside

The 3 months correlation between First and Invesco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Equity and Invesco Raymond James in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Raymond James 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 Equity are associated (or correlated) with Invesco Raymond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Raymond James has no effect on the direction of First Trust i.e., First Trust and Invesco Raymond go up and down completely randomly.

Pair Corralation between First Trust and Invesco Raymond

If you would invest (100.00) in Invesco Raymond James on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Invesco Raymond James or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

First Trust Equity  vs.  Invesco Raymond James

First Trust Equity

Risk-Adjusted Performance

Very Weak

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

Invesco Raymond James

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco Raymond James has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Invesco Raymond is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with First Trust and Invesco Raymond

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

The idea behind First Trust Equity and Invesco Raymond James 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.