Correlation Between Rbb Fund and First Trust
Can any of the company-specific risk be diversified away by investing in both Rbb Fund 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 Rbb Fund and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rbb Fund and First Trust Capital, you can compare the effects of market volatilities on Rbb Fund 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 Rbb Fund with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rbb Fund and First Trust.
Diversification Opportunities for Rbb Fund and First Trust
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rbb and First is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Rbb Fund and First Trust Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Capital and Rbb Fund 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 Rbb Fund 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 Capital has no effect on the direction of Rbb Fund i.e., Rbb Fund and First Trust go up and down completely randomly.
Pair Corralation between Rbb Fund and First Trust
Given the investment horizon of 90 days Rbb Fund is expected to generate 41.61 times less return on investment than First Trust. But when comparing it to its historical volatility, Rbb Fund is 6.66 times less risky than First Trust. It trades about 0.04 of its potential returns per unit of risk. First Trust Capital is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,761 in First Trust Capital on August 30, 2024 and sell it today you would earn a total of 101.00 from holding First Trust Capital or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Rbb Fund vs. First Trust Capital
Performance |
| Timeline |
| Rbb Fund |
| First Trust Capital |
Rbb Fund and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rbb Fund and First Trust
The main advantage of trading using opposite Rbb Fund and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rbb Fund 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.| Rbb Fund vs. Rbb Fund | Rbb Fund vs. Rbb Fund | Rbb Fund vs. US Treasury 12 | Rbb Fund vs. iShares 0 3 Month |
| First Trust vs. First Trust Large | First Trust vs. First Trust Dow | First Trust vs. First Trust Multi | First Trust vs. First Trust Multi |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |