FAAR Forecast


Bullish Case: FAAR may benefit from renewed investor interest driven by economic recovery and rising commodity prices, leveraging its long/short strategy to capitalize on market fluctuations.


Bearish Case: Continued institutional selling and flat price action could indicate waning investor confidence, leading to further declines in FAAR's performance amidst pervasive market uncertainty.


Potential Outcomes:

1. Renewed interest in alternative strategies: 30%;

2. Further institutional selling: 40%;

3. Increased market volatility enhancing returns: 20%;

4. Prolonged stagnation: 10%.


Trading Oracle: Embrace a short volatility stance with near-term credit spreads given FAAR’s flat performance. This strategy leverages low volatility environments, aiming for moderate profits while adapting to possible sector shifts.


July 24, 2024


First Trust Alternative Absolute Return Strategy Forecast

FAAR      First Trust Alternative Absolute Return Strategy











Correlated Assets

Assets that tend to move strongly with FAAR



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.68)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.18)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.02)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.14)



Uncorrelated Assets

Assets with little price relationship to FAAR



LI Forecast + Options Trading Strategies   LI  Li Auto (0.02)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.14)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.18)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.68)



Anticorrelated Assets

Assets that tend to move strongly against FAAR



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.68)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.18)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.02)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.14)





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