Correlation Between Semiconductor Ultrasector and First Trust
Can any of the company-specific risk be diversified away by investing in both Semiconductor Ultrasector 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 Semiconductor Ultrasector and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semiconductor Ultrasector Profund and First Trust Short, you can compare the effects of market volatilities on Semiconductor Ultrasector 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 Semiconductor Ultrasector with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semiconductor Ultrasector and First Trust.
Diversification Opportunities for Semiconductor Ultrasector and First Trust
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEMICONDUCTOR and First is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Semiconductor Ultrasector Prof and First Trust Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Short and Semiconductor Ultrasector 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 Semiconductor Ultrasector Profund 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 Short has no effect on the direction of Semiconductor Ultrasector i.e., Semiconductor Ultrasector and First Trust go up and down completely randomly.
Pair Corralation between Semiconductor Ultrasector and First Trust
Assuming the 90 days horizon Semiconductor Ultrasector Profund is expected to generate 22.81 times more return on investment than First Trust. However, Semiconductor Ultrasector is 22.81 times more volatile than First Trust Short. It trades about 0.12 of its potential returns per unit of risk. First Trust Short is currently generating about 0.12 per unit of risk. If you would invest 2,194 in Semiconductor Ultrasector Profund on April 6, 2025 and sell it today you would earn a total of 1,061 from holding Semiconductor Ultrasector Profund or generate 48.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semiconductor Ultrasector Prof vs. First Trust Short
Performance |
| Timeline |
| Semiconductor Ultrasector |
| First Trust Short |
Semiconductor Ultrasector and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semiconductor Ultrasector and First Trust
The main advantage of trading using opposite Semiconductor Ultrasector and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semiconductor Ultrasector 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.The idea behind Semiconductor Ultrasector Profund and First Trust Short pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| First Trust vs. Aqr Sustainable Long Short | First Trust vs. Astor Longshort Fund | First Trust vs. Lord Abbett Short | First Trust vs. Ab Select Longshort |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |