Correlation Between OneSpan and First Trust
Can any of the company-specific risk be diversified away by investing in both OneSpan 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 OneSpan and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OneSpan and First Trust Brazil, you can compare the effects of market volatilities on OneSpan 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 OneSpan with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of OneSpan and First Trust.
Diversification Opportunities for OneSpan and First Trust
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between OneSpan and First is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding OneSpan and First Trust Brazil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Brazil and OneSpan 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 OneSpan 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 Brazil has no effect on the direction of OneSpan i.e., OneSpan and First Trust go up and down completely randomly.
Pair Corralation between OneSpan and First Trust
Given the investment horizon of 90 days OneSpan is expected to under-perform the First Trust. In addition to that, OneSpan is 1.36 times more volatile than First Trust Brazil. It trades about -0.25 of its total potential returns per unit of risk. First Trust Brazil is currently generating about -0.01 per unit of volatility. If you would invest 992.00 in First Trust Brazil on December 8, 2024 and sell it today you would lose (6.00) from holding First Trust Brazil or give up 0.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OneSpan vs. First Trust Brazil
Performance |
| Timeline |
| OneSpan |
| First Trust Brazil |
OneSpan and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OneSpan and First Trust
The main advantage of trading using opposite OneSpan and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OneSpan 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.| OneSpan vs. Lesaka Technologies | ||
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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