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 The RBB Fund, and First Trust Emerging, 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
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between RBB and First is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding The RBB Fund, and First Trust Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Emerging 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 The 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 Emerging 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 1.66 times less return on investment than First Trust. But when comparing it to its historical volatility, The RBB Fund, is 1.69 times less risky than First Trust. It trades about 0.05 of its potential returns per unit of risk. First Trust Emerging is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,346 in First Trust Emerging on August 26, 2024 and sell it today you would earn a total of 343.00 from holding First Trust Emerging or generate 14.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 44.47% |
| Values | Daily Returns |
The RBB Fund, vs. First Trust Emerging
Performance |
| Timeline |
| RBB Fund, |
| First Trust Emerging |
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. FlexShares Credit Scored Corporate | RBB Fund, vs. FlexShares Disciplined Duration | RBB Fund, vs. FlexShares Quality Large | RBB Fund, vs. First Trust Emerging |
| First Trust vs. First Trust SSI | First Trust vs. First Trust BuyWrite | First Trust vs. First Trust Managed | First Trust vs. First Trust Tactical |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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