Correlation Between Midas Special and First Trust
Can any of the company-specific risk be diversified away by investing in both Midas Special and First Trust 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 Midas Special and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Midas Special Fund and First Trust Short, you can compare the effects of market volatilities on Midas Special and First Trust 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 Midas Special with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Midas Special and First Trust.
Diversification Opportunities for Midas Special and First Trust
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Midas and First is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Midas Special Fund and First Trust Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Short and Midas Special 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 Midas Special Fund are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Short has no effect on the direction of Midas Special i.e., Midas Special and First Trust go up and down completely randomly.
Pair Corralation between Midas Special and First Trust
Assuming the 90 days horizon Midas Special Fund is expected to under-perform the First Trust. In addition to that, Midas Special is 10.01 times more volatile than First Trust Short. It trades about -0.33 of its total potential returns per unit of risk. First Trust Short is currently generating about -0.13 per unit of volatility. If you would invest 1,804 in First Trust Short on December 5, 2024 and sell it today you would lose (5.00) from holding First Trust Short or give up 0.28% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Midas Special Fund vs. First Trust Short
Performance |
Timeline |
Midas Special |
First Trust Short |
Midas Special and First Trust Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Midas Special and First Trust
The main advantage of trading using opposite Midas Special and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midas Special position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.Midas Special vs. Gmo Asset Allocation | Midas Special vs. Franklin Moderate Allocation | Midas Special vs. Principal Lifetime Hybrid | Midas Special vs. Upright Assets Allocation |
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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.
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