Correlation Between Ultra Fund and International Growth
Can any of the company-specific risk be diversified away by investing in both Ultra Fund and International Growth 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 Ultra Fund and International Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultra Fund R5 and International Growth Fund, you can compare the effects of market volatilities on Ultra Fund and International Growth 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 Ultra Fund with a short position of International Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Fund and International Growth.
Diversification Opportunities for Ultra Fund and International Growth
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ultra and International is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Fund R5 and International Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Growth and Ultra Fund 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 Ultra Fund R5 are associated (or correlated) with International Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Growth has no effect on the direction of Ultra Fund i.e., Ultra Fund and International Growth go up and down completely randomly.
Pair Corralation between Ultra Fund and International Growth
Assuming the 90 days horizon Ultra Fund R5 is expected to generate 1.15 times more return on investment than International Growth. However, Ultra Fund is 1.15 times more volatile than International Growth Fund. It trades about 0.13 of its potential returns per unit of risk. International Growth Fund is currently generating about -0.18 per unit of risk. If you would invest 9,644 in Ultra Fund R5 on August 25, 2024 and sell it today you would earn a total of 528.00 from holding Ultra Fund R5 or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Fund R5 vs. International Growth Fund
Performance |
| Timeline |
| Ultra Fund R5 |
| International Growth |
Ultra Fund and International Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Fund and International Growth
The main advantage of trading using opposite Ultra Fund and International Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Fund position performs unexpectedly, International Growth 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 International Growth will offset losses from the drop in International Growth's long position.| Ultra Fund vs. International Growth Fund | Ultra Fund vs. Heritage Fund Investor | Ultra Fund vs. Janus Global Research |
| International Growth vs. Value Fund Investor | International Growth vs. Ultra Fund Investor | International Growth vs. Growth Fund Investor | International Growth vs. Select Fund Investor |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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