Correlation Between First Trust and RBB Fund
Can any of the company-specific risk be diversified away by investing in both First Trust and RBB Fund 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 RBB Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust China and The RBB Fund, you can compare the effects of market volatilities on First Trust and RBB Fund 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 RBB Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and RBB Fund.
Diversification Opportunities for First Trust and RBB Fund
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and RBB is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding First Trust China and The RBB Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBB Fund 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 China are associated (or correlated) with RBB Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBB Fund has no effect on the direction of First Trust i.e., First Trust and RBB Fund go up and down completely randomly.
Pair Corralation between First Trust and RBB Fund
Considering the 90-day investment horizon First Trust China is expected to generate 0.95 times more return on investment than RBB Fund. However, First Trust China is 1.05 times less risky than RBB Fund. It trades about 0.13 of its potential returns per unit of risk. The RBB Fund is currently generating about 0.05 per unit of risk. If you would invest 2,854 in First Trust China on October 28, 2025 and sell it today you would earn a total of 272.00 from holding First Trust China or generate 9.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust China vs. The RBB Fund
Performance |
| Timeline |
| First Trust China |
| RBB Fund |
First Trust and RBB Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and RBB Fund
The main advantage of trading using opposite First Trust and RBB Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, RBB Fund 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 RBB Fund will offset losses from the drop in RBB Fund's long position.| First Trust vs. First Trust United | First Trust vs. First Trust Germany | First Trust vs. First Trust Switzerland | First Trust vs. Invesco SP SmallCap |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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