Correlation Between First Trust and ZJPN
Can any of the company-specific risk be diversified away by investing in both First Trust and ZJPN 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 ZJPN 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 ZJPN, you can compare the effects of market volatilities on First Trust and ZJPN 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 ZJPN. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and ZJPN.
Diversification Opportunities for First Trust and ZJPN
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and ZJPN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Japan and ZJPN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZJPN 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 ZJPN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZJPN has no effect on the direction of First Trust i.e., First Trust and ZJPN go up and down completely randomly.
Pair Corralation between First Trust and ZJPN
If you would invest (100.00) in ZJPN on January 26, 2024 and sell it today you would earn a total of 100.00 from holding ZJPN or generate -100.0% 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. ZJPN
Performance |
| Timeline |
| First Trust Japan |
| ZJPN |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Trust and ZJPN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and ZJPN
The main advantage of trading using opposite First Trust and ZJPN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, ZJPN 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 ZJPN will offset losses from the drop in ZJPN's long position.| First Trust vs. WisdomTree Europe Hedged | First Trust vs. WisdomTree Europe SmallCap | First Trust vs. iShares MSCI Germany |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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