Correlation Between China Natural and First Trust
Can any of the company-specific risk be diversified away by investing in both China Natural 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 China Natural and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Natural Resources and First Trust, you can compare the effects of market volatilities on China Natural 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 China Natural with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Natural and First Trust.
Diversification Opportunities for China Natural and First Trust
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Natural Resources and First Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust and China Natural 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 China Natural Resources 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 has no effect on the direction of China Natural i.e., China Natural and First Trust go up and down completely randomly.
Pair Corralation between China Natural and First Trust
If you would invest (100.00) in First Trust on January 26, 2024 and sell it today you would earn a total of 100.00 from holding First Trust 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 |
China Natural Resources vs. First Trust
Performance |
Timeline |
China Natural Resources |
First Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Natural and First Trust Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Natural and First Trust
The main advantage of trading using opposite China Natural and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Natural 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.China Natural vs. Seychelle Environmtl | China Natural vs. Vow ASA | China Natural vs. Eestech | China Natural vs. Energy and Water |
First Trust vs. First Trust Exchange Traded | First Trust vs. First Trust Exchange Traded | First Trust vs. First Trust Dorsey | First Trust vs. First Trust Multi Asset |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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