Correlation Between Slow Capital and First Trust
Can any of the company-specific risk be diversified away by investing in both Slow Capital 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 Slow Capital and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Slow Capital Growth and First Trust Preferred, you can compare the effects of market volatilities on Slow Capital 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 Slow Capital with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slow Capital and First Trust.
Diversification Opportunities for Slow Capital and First Trust
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Slow and First is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Slow Capital Growth and First Trust Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Preferred and Slow Capital 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 Slow Capital Growth 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 Preferred has no effect on the direction of Slow Capital i.e., Slow Capital and First Trust go up and down completely randomly.
Pair Corralation between Slow Capital and First Trust
Assuming the 90 days horizon Slow Capital Growth is expected to generate 8.59 times more return on investment than First Trust. However, Slow Capital is 8.59 times more volatile than First Trust Preferred. It trades about 0.1 of its potential returns per unit of risk. First Trust Preferred is currently generating about 0.53 per unit of risk. If you would invest 976.00 in Slow Capital Growth on April 16, 2025 and sell it today you would earn a total of 17.00 from holding Slow Capital Growth or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Slow Capital Growth vs. First Trust Preferred
Performance |
| Timeline |
| Slow Capital Growth |
| First Trust Preferred |
Slow Capital and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Slow Capital and First Trust
The main advantage of trading using opposite Slow Capital and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Slow Capital 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.| Slow Capital vs. Lebenthal Ultra Short | Slow Capital vs. Alpine Ultra Short | Slow Capital vs. Quantitative Longshort Equity | Slow Capital vs. Astor Longshort Fund |
| First Trust vs. Lord Abbett Inflation | First Trust vs. Pimco Inflation Response | First Trust vs. Ab Bond Inflation | First Trust vs. Blackrock Inflation Protected |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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