Correlation Between VanEck Natural and First Trust
Can any of the company-specific risk be diversified away by investing in both VanEck Natural 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 VanEck Natural and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Natural Resources and First Trust LongShort, you can compare the effects of market volatilities on VanEck Natural 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 VanEck Natural with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Natural and First Trust.
Diversification Opportunities for VanEck Natural and First Trust
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and First is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Natural Resources and First Trust LongShort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust LongShort and VanEck Natural 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 VanEck Natural Resources 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 LongShort has no effect on the direction of VanEck Natural i.e., VanEck Natural and First Trust go up and down completely randomly.
Pair Corralation between VanEck Natural and First Trust
Considering the 90-day investment horizon VanEck Natural is expected to generate 1.03 times less return on investment than First Trust. In addition to that, VanEck Natural is 1.25 times more volatile than First Trust LongShort. It trades about 0.08 of its total potential returns per unit of risk. First Trust LongShort is currently generating about 0.11 per unit of volatility. If you would invest 6,742 in First Trust LongShort on August 24, 2025 and sell it today you would earn a total of 280.00 from holding First Trust LongShort or generate 4.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Natural Resources vs. First Trust LongShort
Performance |
| Timeline |
| VanEck Natural Resources |
| First Trust LongShort |
VanEck Natural and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Natural and First Trust
The main advantage of trading using opposite VanEck Natural and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Natural 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.| VanEck Natural vs. iShares MSCI Global | VanEck Natural vs. Innovator MSCI EAFE | VanEck Natural vs. EA Series Trust | VanEck Natural vs. iShares Self Driving EV |
| First Trust vs. Fidelity MSCI Utilities | First Trust vs. JPMorgan Market Expansion | First Trust vs. Trust For Professional | First Trust vs. iShares ESG Aware |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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