Correlation Between Ultrapar Participacoes and First Trust
Can any of the company-specific risk be diversified away by investing in both Ultrapar Participacoes 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 Ultrapar Participacoes and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultrapar Participacoes SA and First Trust Multi, you can compare the effects of market volatilities on Ultrapar Participacoes 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 Ultrapar Participacoes with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultrapar Participacoes and First Trust.
Diversification Opportunities for Ultrapar Participacoes and First Trust
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ultrapar and First is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ultrapar Participacoes SA and First Trust Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Multi and Ultrapar Participacoes 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 Ultrapar Participacoes SA 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 Multi has no effect on the direction of Ultrapar Participacoes i.e., Ultrapar Participacoes and First Trust go up and down completely randomly.
Pair Corralation between Ultrapar Participacoes and First Trust
Considering the 90-day investment horizon Ultrapar Participacoes SA is expected to generate 2.92 times more return on investment than First Trust. However, Ultrapar Participacoes is 2.92 times more volatile than First Trust Multi. It trades about 0.18 of its potential returns per unit of risk. First Trust Multi is currently generating about 0.19 per unit of risk. If you would invest 278.00 in Ultrapar Participacoes SA on May 31, 2025 and sell it today you would earn a total of 87.00 from holding Ultrapar Participacoes SA or generate 31.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultrapar Participacoes SA vs. First Trust Multi
Performance |
| Timeline |
| Ultrapar Participacoes |
| First Trust Multi |
Ultrapar Participacoes and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultrapar Participacoes and First Trust
The main advantage of trading using opposite Ultrapar Participacoes and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultrapar Participacoes 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.| Ultrapar Participacoes vs. Cosan SA ADR | Ultrapar Participacoes vs. Neste Oyj | Ultrapar Participacoes vs. Star Gas Partners | Ultrapar Participacoes vs. Valvoline |
| First Trust vs. First Trust Multi | First Trust vs. First Trust Small | First Trust vs. First Trust Large | First Trust vs. First Trust Large |
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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