Correlation Between STKd 100 and First Trust
Can any of the company-specific risk be diversified away by investing in both STKd 100 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 STKd 100 and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STKd 100 percent and First Trust Exchange Traded, you can compare the effects of market volatilities on STKd 100 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 STKd 100 with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of STKd 100 and First Trust.
Diversification Opportunities for STKd 100 and First Trust
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STKd and First is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding STKd 100 percent and First Trust Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Exchange and STKd 100 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 STKd 100 percent 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 Exchange has no effect on the direction of STKd 100 i.e., STKd 100 and First Trust go up and down completely randomly.
Pair Corralation between STKd 100 and First Trust
Given the investment horizon of 90 days STKd 100 percent is expected to generate 16.39 times more return on investment than First Trust. However, STKd 100 is 16.39 times more volatile than First Trust Exchange Traded. It trades about 0.08 of its potential returns per unit of risk. First Trust Exchange Traded is currently generating about 0.26 per unit of risk. If you would invest 2,137 in STKd 100 percent on May 31, 2025 and sell it today you would earn a total of 413.00 from holding STKd 100 percent or generate 19.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STKd 100 percent vs. First Trust Exchange Traded
Performance |
| Timeline |
| STKd 100 percent |
| First Trust Exchange |
STKd 100 and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STKd 100 and First Trust
The main advantage of trading using opposite STKd 100 and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STKd 100 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.| STKd 100 vs. JPMorgan Equity Premium | STKd 100 vs. Amplify CWP Enhanced | STKd 100 vs. JPMorgan Nasdaq Equity | STKd 100 vs. FT Cboe Vest |
| First Trust vs. First Trust Exchange Traded | First Trust vs. First Trust Exchange Traded | First Trust vs. FT Cboe Vest | First Trust vs. FT Cboe Vest |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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