Correlation Between First Trust and Cabana Target
Can any of the company-specific risk be diversified away by investing in both First Trust and Cabana Target 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 Cabana Target into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Dorsey and Cabana Target Drawdown, you can compare the effects of market volatilities on First Trust and Cabana Target 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 Cabana Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Cabana Target.
Diversification Opportunities for First Trust and Cabana Target
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Cabana is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Dorsey and Cabana Target Drawdown in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabana Target Drawdown 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 Dorsey are associated (or correlated) with Cabana Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabana Target Drawdown has no effect on the direction of First Trust i.e., First Trust and Cabana Target go up and down completely randomly.
Pair Corralation between First Trust and Cabana Target
Considering the 90-day investment horizon First Trust Dorsey is expected to under-perform the Cabana Target. But the etf apears to be less risky and, when comparing its historical volatility, First Trust Dorsey is 1.48 times less risky than Cabana Target. The etf trades about -0.05 of its potential returns per unit of risk. The Cabana Target Drawdown is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,472 in Cabana Target Drawdown on August 26, 2025 and sell it today you would earn a total of 17.50 from holding Cabana Target Drawdown or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Dorsey vs. Cabana Target Drawdown
Performance |
| Timeline |
| First Trust Dorsey |
| Cabana Target Drawdown |
First Trust and Cabana Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Cabana Target
The main advantage of trading using opposite First Trust and Cabana Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Cabana Target 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 Cabana Target will offset losses from the drop in Cabana Target's long position.| First Trust vs. ClearBridge Dividend Strategy | First Trust vs. Pacer Benchmark Industrial | First Trust vs. Elevation Series Trust | First Trust vs. Goldman Sachs ActiveBeta |
| Cabana Target vs. VanEck Low Carbon | Cabana Target vs. Inspire Global Hope | Cabana Target vs. AB High Dividend | Cabana Target vs. First Trust RiverFront |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |