Correlation Between First Trust and Avantis Emerging

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

By analyzing existing cross correlation between First Trust Mid and Avantis Emerging Markets, you can compare the effects of market volatilities on First Trust and Avantis Emerging 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 Avantis Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Avantis Emerging.

Diversification Opportunities for First Trust and Avantis Emerging

-0.64

Correlation Coefficient

First Trust  Avantis Emerging

Excellent diversification

The 3 months correlation between First and Avantis is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Mid and Avantis Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis Emerging Markets 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 Mid are associated (or correlated) with Avantis Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis Emerging Markets has no effect on the direction of First Trust i.e., First Trust and Avantis Emerging go up and down completely randomly.

Pair Corralation between First Trust and Avantis Emerging

Considering the 90-day investment horizon First Trust Mid is expected to under-perform the Avantis Emerging. In addition to that, First Trust is 1.06 times more volatile than Avantis Emerging Markets. It trades about -0.06 of its total potential returns per unit of risk. Avantis Emerging Markets is currently generating about 0.1 per unit of volatility. If you would invest  5,748  in Avantis Emerging Markets on August 24, 2025 and sell it today you would earn a total of  331.00  from holding Avantis Emerging Markets or generate 5.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

First Trust Mid  vs.  Avantis Emerging Markets

First Trust Mid

Risk-Adjusted Performance

Weakest

Over the last 90 days First Trust Mid has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, First Trust is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Avantis Emerging Markets

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Avantis Emerging Markets are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Avantis Emerging is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with First Trust and Avantis Emerging

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

The idea behind First Trust Mid and Avantis Emerging Markets 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.