Correlation Between First Trust and Picton Mahoney
Can any of the company-specific risk be diversified away by investing in both First Trust and Picton Mahoney 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 Picton Mahoney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Senior and Picton Mahoney Fortified, you can compare the effects of market volatilities on First Trust and Picton Mahoney 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 Picton Mahoney. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Picton Mahoney.
Diversification Opportunities for First Trust and Picton Mahoney
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Picton is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Senior and Picton Mahoney Fortified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Picton Mahoney Fortified 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 Senior are associated (or correlated) with Picton Mahoney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Picton Mahoney Fortified has no effect on the direction of First Trust i.e., First Trust and Picton Mahoney go up and down completely randomly.
Pair Corralation between First Trust and Picton Mahoney
Assuming the 90 days trading horizon First Trust is expected to generate 1.08 times less return on investment than Picton Mahoney. In addition to that, First Trust is 1.22 times more volatile than Picton Mahoney Fortified. It trades about 0.05 of its total potential returns per unit of risk. Picton Mahoney Fortified is currently generating about 0.07 per unit of volatility. If you would invest 1,145 in Picton Mahoney Fortified on December 10, 2024 and sell it today you would earn a total of 37.00 from holding Picton Mahoney Fortified or generate 3.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
First Trust Senior vs. Picton Mahoney Fortified
Performance |
Timeline |
First Trust Senior |
Picton Mahoney Fortified |
First Trust and Picton Mahoney Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Trust and Picton Mahoney
The main advantage of trading using opposite First Trust and Picton Mahoney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Picton Mahoney 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 Picton Mahoney will offset losses from the drop in Picton Mahoney's long position.First Trust vs. First Trust Global | First Trust vs. FT AlphaDEX Industrials | First Trust vs. First Trust Value | First Trust vs. Global X Active |
Picton Mahoney vs. Picton Mahoney Fortified | Picton Mahoney vs. Picton Mahoney Fortified | Picton Mahoney vs. Picton Mahoney Fortified | Picton Mahoney vs. Picton Mahoney Fortified |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Commodity Directory Find actively traded commodities issued by global exchanges |