Correlation Between Pacific North and First Trust
Can any of the company-specific risk be diversified away by investing in both Pacific North 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 Pacific North and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific North of and First Trust Active, you can compare the effects of market volatilities on Pacific North 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 Pacific North with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific North and First Trust.
Diversification Opportunities for Pacific North and First Trust
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pacific and First is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Pacific North of and First Trust Active in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Active and Pacific North 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 Pacific North of 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 Active has no effect on the direction of Pacific North i.e., Pacific North and First Trust go up and down completely randomly.
Pair Corralation between Pacific North and First Trust
Given the investment horizon of 90 days Pacific North of is expected to generate 1.02 times more return on investment than First Trust. However, Pacific North is 1.02 times more volatile than First Trust Active. It trades about 0.12 of its potential returns per unit of risk. First Trust Active is currently generating about 0.04 per unit of risk. If you would invest 3,020 in Pacific North of on October 7, 2025 and sell it today you would earn a total of 256.00 from holding Pacific North of or generate 8.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Pacific North of vs. First Trust Active
Performance |
| Timeline |
| Pacific North |
| First Trust Active |
Pacific North and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific North and First Trust
The main advantage of trading using opposite Pacific North and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific North 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.| Pacific North vs. Invesco KBW Regional | Pacific North vs. PortfolioPlus Emerging Markets | Pacific North vs. Emerging Markets Active | Pacific North vs. Xtrackers FTSE Developed |
| First Trust vs. Sonora Resources Corp | First Trust vs. REX VolMAXX Long | First Trust vs. iShares AsiaPacific Dividend | First Trust vs. First Trust Dow |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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