Correlation Between First Trust and JPN
Can any of the company-specific risk be diversified away by investing in both First Trust and JPN 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 JPN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Japan and JPN, you can compare the effects of market volatilities on First Trust and JPN 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 JPN. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and JPN.
Diversification Opportunities for First Trust and JPN
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and JPN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Japan and JPN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPN 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 Japan are associated (or correlated) with JPN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPN has no effect on the direction of First Trust i.e., First Trust and JPN go up and down completely randomly.
Pair Corralation between First Trust and JPN
If you would invest 4,196 in First Trust Japan on January 18, 2024 and sell it today you would earn a total of 1,086 from holding First Trust Japan or generate 25.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
First Trust Japan vs. JPN
Performance |
| Timeline |
| First Trust Japan |
| JPN |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Trust and JPN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and JPN
The main advantage of trading using opposite First Trust and JPN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, JPN 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 JPN will offset losses from the drop in JPN's long position.| First Trust vs. WisdomTree Emerging Markets | First Trust vs. WisdomTree SmallCap Quality | First Trust vs. First Trust Emerging |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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