Correlation Between JPMorgan Chase and First Trust
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase 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 JPMorgan Chase and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Chase Co and First Trust Nasdaq, you can compare the effects of market volatilities on JPMorgan Chase 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 JPMorgan Chase with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and First Trust.
Diversification Opportunities for JPMorgan Chase and First Trust
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JPMorgan and First is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and First Trust Nasdaq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Nasdaq and JPMorgan Chase 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 JPMorgan Chase Co 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 Nasdaq has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and First Trust go up and down completely randomly.
Pair Corralation between JPMorgan Chase and First Trust
Considering the 90-day investment horizon JPMorgan Chase is expected to generate 2.91 times less return on investment than First Trust. But when comparing it to its historical volatility, JPMorgan Chase Co is 1.58 times less risky than First Trust. It trades about 0.05 of its potential returns per unit of risk. First Trust Nasdaq is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,756 in First Trust Nasdaq on September 13, 2024 and sell it today you would earn a total of 43.00 from holding First Trust Nasdaq or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. First Trust Nasdaq
Performance |
| Timeline |
| JPMorgan Chase |
| First Trust Nasdaq |
JPMorgan Chase and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and First Trust
The main advantage of trading using opposite JPMorgan Chase and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase 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.| JPMorgan Chase vs. Nu Holdings | JPMorgan Chase vs. HSBC Holdings PLC | JPMorgan Chase vs. Bank of Montreal | JPMorgan Chase vs. Bank of Nova |
| First Trust vs. First Trust Nasdaq | First Trust vs. Global X Aging | First Trust vs. Invesco Nasdaq Biotechnology | First Trust vs. First Trust Indxx |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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