Correlation Between UBS and First Trust
Can any of the company-specific risk be diversified away by investing in both UBS 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 UBS and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS and First Trust Nasdaq, you can compare the effects of market volatilities on UBS 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 UBS with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS and First Trust.
Diversification Opportunities for UBS and First Trust
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UBS and First is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding UBS 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 UBS 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 UBS 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 UBS i.e., UBS and First Trust go up and down completely randomly.
Pair Corralation between UBS and First Trust
If you would invest 2,451 in First Trust Nasdaq on August 30, 2024 and sell it today you would earn a total of 4.00 from holding First Trust Nasdaq or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
UBS vs. First Trust Nasdaq
Performance |
| Timeline |
| UBS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Trust Nasdaq |
UBS and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS and First Trust
The main advantage of trading using opposite UBS and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS 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.The idea behind UBS and First Trust Nasdaq pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| First Trust vs. Fidelity MSCI Utilities | First Trust vs. Fidelity MSCI Industrials | First Trust vs. Fidelity MSCI Materials | First Trust vs. Fidelity MSCI Consumer |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |