Correlation Between Purpose Core and First Trust
Can any of the company-specific risk be diversified away by investing in both Purpose Core 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 Purpose Core and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Purpose Core Dividend and First Trust Canadian, you can compare the effects of market volatilities on Purpose Core 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 Purpose Core with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Purpose Core and First Trust.
Diversification Opportunities for Purpose Core and First Trust
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Purpose and First is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Purpose Core Dividend and First Trust Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Canadian and Purpose Core 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 Purpose Core Dividend 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 Canadian has no effect on the direction of Purpose Core i.e., Purpose Core and First Trust go up and down completely randomly.
Pair Corralation between Purpose Core and First Trust
Assuming the 90 days trading horizon Purpose Core Dividend is expected to generate 0.58 times more return on investment than First Trust. However, Purpose Core Dividend is 1.72 times less risky than First Trust. It trades about 0.32 of its potential returns per unit of risk. First Trust Canadian is currently generating about 0.1 per unit of risk. If you would invest 3,727 in Purpose Core Dividend on November 18, 2025 and sell it today you would earn a total of 352.00 from holding Purpose Core Dividend or generate 9.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Purpose Core Dividend vs. First Trust Canadian
Performance |
| Timeline |
| Purpose Core Dividend |
| First Trust Canadian |
Purpose Core and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Purpose Core and First Trust
The main advantage of trading using opposite Purpose Core and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Purpose Core 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.| Purpose Core vs. Purpose International Dividend | Purpose Core vs. Purpose Enhanced Dividend | Purpose Core vs. iShares High Dividend | Purpose Core vs. Fidelity Value Currency |
| First Trust vs. iShares ESG Equity | First Trust vs. iShares MSCI Min | First Trust vs. Invesco RAFI Canadian | First Trust vs. Desjardins RI Developed |
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 Positions Ratings module to 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.
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