Correlation Between First Trust and Advisors Inner
Can any of the company-specific risk be diversified away by investing in both First Trust and Advisors Inner 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 Advisors Inner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Alternative and The Advisors Inner, you can compare the effects of market volatilities on First Trust and Advisors Inner 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 Advisors Inner. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Advisors Inner.
Diversification Opportunities for First Trust and Advisors Inner
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Advisors is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Alternative and The Advisors Inner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advisors Inner 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 Alternative are associated (or correlated) with Advisors Inner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advisors Inner has no effect on the direction of First Trust i.e., First Trust and Advisors Inner go up and down completely randomly.
Pair Corralation between First Trust and Advisors Inner
Given the investment horizon of 90 days First Trust Alternative is expected to generate 1.84 times more return on investment than Advisors Inner. However, First Trust is 1.84 times more volatile than The Advisors Inner. It trades about 0.11 of its potential returns per unit of risk. The Advisors Inner is currently generating about 0.17 per unit of risk. If you would invest 2,855 in First Trust Alternative on July 20, 2025 and sell it today you would earn a total of 149.00 from holding First Trust Alternative or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Alternative vs. The Advisors Inner
Performance |
| Timeline |
| First Trust Alternative |
| Advisors Inner |
First Trust and Advisors Inner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Advisors Inner
The main advantage of trading using opposite First Trust and Advisors Inner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Advisors Inner 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 Advisors Inner will offset losses from the drop in Advisors Inner's long position.| First Trust vs. VanEck India Growth | First Trust vs. ProShares Trust | First Trust vs. First Trust Dorsey | First Trust vs. Pacer Emerging Markets |
| Advisors Inner vs. First Trust Multi Asset | Advisors Inner vs. Collaborative Investment Series | Advisors Inner vs. Draco Evolution AI | Advisors Inner vs. Aptus Defined Risk |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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