Correlation Between Cmg Ultra and First Trust
Can any of the company-specific risk be diversified away by investing in both Cmg Ultra 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 Cmg Ultra and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cmg Ultra Short and First Trust Preferred, you can compare the effects of market volatilities on Cmg Ultra 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 Cmg Ultra with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cmg Ultra and First Trust.
Diversification Opportunities for Cmg Ultra and First Trust
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cmg and First is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Cmg Ultra Short and First Trust Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Preferred and Cmg Ultra 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 Cmg Ultra Short 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 Preferred has no effect on the direction of Cmg Ultra i.e., Cmg Ultra and First Trust go up and down completely randomly.
Pair Corralation between Cmg Ultra and First Trust
Assuming the 90 days horizon Cmg Ultra is expected to generate 3.21 times less return on investment than First Trust. But when comparing it to its historical volatility, Cmg Ultra Short is 1.57 times less risky than First Trust. It trades about 0.24 of its potential returns per unit of risk. First Trust Preferred is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 1,943 in First Trust Preferred on May 27, 2025 and sell it today you would earn a total of 90.00 from holding First Trust Preferred or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cmg Ultra Short vs. First Trust Preferred
Performance |
| Timeline |
| Cmg Ultra Short |
| First Trust Preferred |
Cmg Ultra and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cmg Ultra and First Trust
The main advantage of trading using opposite Cmg Ultra and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cmg Ultra 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.| Cmg Ultra vs. Bbh Intermediate Municipal | Cmg Ultra vs. California Municipal Portfolio | Cmg Ultra vs. Morningstar Defensive Bond | Cmg Ultra vs. Short Intermediate Bond Fund |
| First Trust vs. L Abbett Growth | First Trust vs. Pnc Balanced Allocation | First Trust vs. Tax Managed Large Cap | First Trust vs. Qs Global Equity |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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