Correlation Between First Trust and GraniteShares Bloomberg

Can any of the company-specific risk be diversified away by investing in both First Trust and GraniteShares Bloomberg 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 First Trust and GraniteShares Bloomberg into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Trust Global and GraniteShares Bloomberg Commodity, you can compare the effects of market volatilities on First Trust and GraniteShares Bloomberg 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 First Trust with a short position of GraniteShares Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and GraniteShares Bloomberg.

Diversification Opportunities for First Trust and GraniteShares Bloomberg

0.97

Correlation Coefficient

First Trust  GraniteShares Bloomberg

Almost no diversification

The 3 months correlation between First and GraniteShares is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Global and GraniteShares Bloomberg Commod in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares Bloomberg and First Trust 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 First Trust Global are associated (or correlated) with GraniteShares Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares Bloomberg has no effect on the direction of First Trust i.e., First Trust and GraniteShares Bloomberg go up and down completely randomly.

Pair Corralation between First Trust and GraniteShares Bloomberg

Given the investment horizon of 90 days First Trust Global is expected to under-perform the GraniteShares Bloomberg. In addition to that, First Trust is 1.03 times more volatile than GraniteShares Bloomberg Commodity. It trades about -0.04 of its total potential returns per unit of risk. GraniteShares Bloomberg Commodity is currently generating about -0.01 per unit of volatility. If you would invest  2,098  in GraniteShares Bloomberg Commodity on February 3, 2025 and sell it today you would lose (24.00) from holding GraniteShares Bloomberg Commodity or give up 1.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

First Trust Global  vs.  GraniteShares Bloomberg Commod

First Trust Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Trust Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, First Trust is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

GraniteShares Bloomberg

Risk-Adjusted Performance

Very Weak

Over the last 90 days GraniteShares Bloomberg Commodity has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, GraniteShares Bloomberg is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with First Trust and GraniteShares Bloomberg

The main advantage of trading using opposite First Trust and GraniteShares Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, GraniteShares Bloomberg 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 GraniteShares Bloomberg will offset losses from the drop in GraniteShares Bloomberg's long position.

The idea behind First Trust Global and GraniteShares Bloomberg Commodity 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.