Correlation Between First Trust and SPDR Galaxy
Can any of the company-specific risk be diversified away by investing in both First Trust and SPDR Galaxy 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 SPDR Galaxy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Dow and SPDR Galaxy Transformative, you can compare the effects of market volatilities on First Trust and SPDR Galaxy 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 SPDR Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and SPDR Galaxy.
Diversification Opportunities for First Trust and SPDR Galaxy
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and SPDR is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Dow and SPDR Galaxy Transformative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Galaxy Transfor 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 Dow are associated (or correlated) with SPDR Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Galaxy Transfor has no effect on the direction of First Trust i.e., First Trust and SPDR Galaxy go up and down completely randomly.
Pair Corralation between First Trust and SPDR Galaxy
Considering the 90-day investment horizon First Trust is expected to generate 2.76 times less return on investment than SPDR Galaxy. But when comparing it to its historical volatility, First Trust Dow is 1.9 times less risky than SPDR Galaxy. It trades about 0.14 of its potential returns per unit of risk. SPDR Galaxy Transformative is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,651 in SPDR Galaxy Transformative on June 2, 2025 and sell it today you would earn a total of 725.00 from holding SPDR Galaxy Transformative or generate 27.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Dow vs. SPDR Galaxy Transformative
Performance |
| Timeline |
| First Trust Dow |
| SPDR Galaxy Transfor |
First Trust and SPDR Galaxy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and SPDR Galaxy
The main advantage of trading using opposite First Trust and SPDR Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, SPDR Galaxy 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 SPDR Galaxy will offset losses from the drop in SPDR Galaxy's long position.| First Trust vs. First Trust Cloud | First Trust vs. iShares Expanded Tech Software | First Trust vs. Invesco NASDAQ Internet | First Trust vs. First Trust NASDAQ 100 Technology |
| SPDR Galaxy vs. Strategy Shares | SPDR Galaxy vs. Freedom Day Dividend | SPDR Galaxy vs. iShares MSCI China | SPDR Galaxy vs. iShares Dividend and |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |