Correlation Between TTM Technologies and First Trust

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

By analyzing existing cross correlation between TTM Technologies and First Trust Flexible, you can compare the effects of market volatilities on TTM Technologies 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 TTM Technologies with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of TTM Technologies and First Trust.

Diversification Opportunities for TTM Technologies and First Trust

0.04

Correlation Coefficient

TTM Technologies  First Trust

Significant diversification

The 3 months correlation between TTM and First is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding TTM Technologies and First Trust Flexible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Flexible and TTM Technologies 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 TTM Technologies 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 Flexible has no effect on the direction of TTM Technologies i.e., TTM Technologies and First Trust go up and down completely randomly.

Pair Corralation between TTM Technologies and First Trust

Given the investment horizon of 90 days TTM Technologies is expected to generate 2.49 times more return on investment than First Trust. However, TTM Technologies is 2.49 times more volatile than First Trust Flexible. It trades about 0.59 of its potential returns per unit of risk. First Trust Flexible is currently generating about 0.09 per unit of risk. If you would invest  2,323  in TTM Technologies on September 17, 2024 and sell it today you would earn a total of  251.00  from holding TTM Technologies or generate 10.8% return on investment over 90 days.

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

TTM Technologies  vs.  First Trust Flexible

TTM Technologies

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TTM Technologies are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating primary indicators, TTM Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

First Trust Flexible

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with TTM Technologies and First Trust

The main advantage of trading using opposite TTM Technologies and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TTM Technologies 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.

The idea behind TTM Technologies and First Trust Flexible 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.

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 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.