Correlation Between First Trust and JPMorgan Market
Can any of the company-specific risk be diversified away by investing in both First Trust and JPMorgan Market 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 JPMorgan Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust LongShort and JPMorgan Market Expansion, you can compare the effects of market volatilities on First Trust and JPMorgan Market 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 JPMorgan Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and JPMorgan Market.
Diversification Opportunities for First Trust and JPMorgan Market
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and JPMorgan is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding First Trust LongShort and JPMorgan Market Expansion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Market Expansion 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 LongShort are associated (or correlated) with JPMorgan Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Market Expansion has no effect on the direction of First Trust i.e., First Trust and JPMorgan Market go up and down completely randomly.
Pair Corralation between First Trust and JPMorgan Market
Given the investment horizon of 90 days First Trust LongShort is expected to generate 0.58 times more return on investment than JPMorgan Market. However, First Trust LongShort is 1.72 times less risky than JPMorgan Market. It trades about 0.2 of its potential returns per unit of risk. JPMorgan Market Expansion is currently generating about 0.03 per unit of risk. If you would invest 6,864 in First Trust LongShort on August 14, 2025 and sell it today you would earn a total of 332.00 from holding First Trust LongShort or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust LongShort vs. JPMorgan Market Expansion
Performance |
| Timeline |
| First Trust LongShort |
| JPMorgan Market Expansion |
First Trust and JPMorgan Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and JPMorgan Market
The main advantage of trading using opposite First Trust and JPMorgan Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, JPMorgan Market 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 JPMorgan Market will offset losses from the drop in JPMorgan Market's long position.| First Trust vs. Fidelity MSCI Utilities | First Trust vs. JPMorgan Market Expansion | First Trust vs. Trust For Professional | First Trust vs. iShares ESG Aware |
| JPMorgan Market vs. iShares ESG Aware | JPMorgan Market vs. iShares MSCI Germany | JPMorgan Market vs. First Trust LongShort | JPMorgan Market vs. Fidelity MSCI Utilities |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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