Correlation Between Rayliant Quantamental and First Trust
Can any of the company-specific risk be diversified away by investing in both Rayliant Quantamental 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 Rayliant Quantamental and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rayliant Quantamental China and First Trust EIP, you can compare the effects of market volatilities on Rayliant Quantamental 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 Rayliant Quantamental with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rayliant Quantamental and First Trust.
Diversification Opportunities for Rayliant Quantamental and First Trust
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rayliant and First is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Rayliant Quantamental China and First Trust EIP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust EIP and Rayliant Quantamental 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 Rayliant Quantamental China 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 EIP has no effect on the direction of Rayliant Quantamental i.e., Rayliant Quantamental and First Trust go up and down completely randomly.
Pair Corralation between Rayliant Quantamental and First Trust
Given the investment horizon of 90 days Rayliant Quantamental is expected to generate 1.75 times less return on investment than First Trust. In addition to that, Rayliant Quantamental is 2.14 times more volatile than First Trust EIP. It trades about 0.05 of its total potential returns per unit of risk. First Trust EIP is currently generating about 0.21 per unit of volatility. If you would invest 3,217 in First Trust EIP on August 30, 2025 and sell it today you would earn a total of 240.00 from holding First Trust EIP or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rayliant Quantamental China vs. First Trust EIP
Performance |
| Timeline |
| Rayliant Quantamental |
| First Trust EIP |
Rayliant Quantamental and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rayliant Quantamental and First Trust
The main advantage of trading using opposite Rayliant Quantamental and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rayliant Quantamental 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.| Rayliant Quantamental vs. Strategy Shares | Rayliant Quantamental vs. Freedom Day Dividend | Rayliant Quantamental vs. Franklin Templeton ETF | Rayliant Quantamental vs. iShares MSCI China |
| First Trust vs. Ultimus Managers Trust | First Trust vs. American Beacon Select | First Trust vs. Direxion Daily SP | First Trust vs. EA Series Trust |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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