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 Exchange Traded, 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

-0.74

Correlation Coefficient

RBB Fund  First Trust

Pay attention - limited upside

The 3 months correlation between RBB and First is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding The RBB Fund and First Trust Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Exchange 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 Exchange 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 The RBB Fund is expected to under-perform the First Trust. But the etf apears to be less risky and, when comparing its historical volatility, The RBB Fund is 1.37 times less risky than First Trust. The etf trades about -0.04 of its potential returns per unit of risk. The First Trust Exchange Traded is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,590  in First Trust Exchange Traded on August 3, 2025 and sell it today you would earn a total of  846.00  from holding First Trust Exchange Traded or generate 32.66% return on investment over 90 days.

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

The RBB Fund  vs.  First Trust Exchange Traded

RBB Fund

Risk-Adjusted Performance

Weakest

Over the last 90 days The RBB Fund has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

First Trust Exchange

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Exchange Traded are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, First Trust reported solid returns over the last few months and may actually be approaching a breakup point.

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.

The idea behind The RBB Fund and First Trust Exchange Traded 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.