Correlation Between First Trust and Schwab International
Can any of the company-specific risk be diversified away by investing in both First Trust and Schwab International 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 Schwab International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Large and Schwab International Dividend, you can compare the effects of market volatilities on First Trust and Schwab International 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 Schwab International. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Schwab International.
Diversification Opportunities for First Trust and Schwab International
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and Schwab is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Large and Schwab International Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab International 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 Large are associated (or correlated) with Schwab International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab International has no effect on the direction of First Trust i.e., First Trust and Schwab International go up and down completely randomly.
Pair Corralation between First Trust and Schwab International
Considering the 90-day investment horizon First Trust is expected to generate 1.6 times less return on investment than Schwab International. In addition to that, First Trust is 1.54 times more volatile than Schwab International Dividend. It trades about 0.08 of its total potential returns per unit of risk. Schwab International Dividend is currently generating about 0.19 per unit of volatility. If you would invest 2,758 in Schwab International Dividend on August 30, 2025 and sell it today you would earn a total of 187.00 from holding Schwab International Dividend or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Large vs. Schwab International Dividend
Performance |
| Timeline |
| First Trust Large |
| Schwab International |
First Trust and Schwab International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Schwab International
The main advantage of trading using opposite First Trust and Schwab International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Schwab International 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 Schwab International will offset losses from the drop in Schwab International's long position.| First Trust vs. FT Vest Equity | First Trust vs. Northern Lights | First Trust vs. Diamond Hill Funds | First Trust vs. Dimensional International High |
| Schwab International vs. Strategy Shares | Schwab International vs. Freedom Day Dividend | Schwab International vs. Franklin Templeton ETF | Schwab International vs. iShares MSCI China |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| AI Portfolio Prophet Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |