Correlation Between Ultra Fund and Strategic Income
Can any of the company-specific risk be diversified away by investing in both Ultra Fund and Strategic Income 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 Strategic Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultra Fund C and Strategic Income Fund, you can compare the effects of market volatilities on Ultra Fund and Strategic Income 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 Strategic Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Fund and Strategic Income.
Diversification Opportunities for Ultra Fund and Strategic Income
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ultra and Strategic is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Fund C and Strategic Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Income 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 C are associated (or correlated) with Strategic Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Income has no effect on the direction of Ultra Fund i.e., Ultra Fund and Strategic Income go up and down completely randomly.
Pair Corralation between Ultra Fund and Strategic Income
Assuming the 90 days horizon Ultra Fund C is expected to generate 5.25 times more return on investment than Strategic Income. However, Ultra Fund is 5.25 times more volatile than Strategic Income Fund. It trades about 0.07 of its potential returns per unit of risk. Strategic Income Fund is currently generating about 0.13 per unit of risk. If you would invest 5,962 in Ultra Fund C on September 3, 2024 and sell it today you would earn a total of 611.00 from holding Ultra Fund C or generate 10.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Fund C vs. Strategic Income Fund
Performance |
| Timeline |
| Ultra Fund C |
| Strategic Income |
Ultra Fund and Strategic Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Fund and Strategic Income
The main advantage of trading using opposite Ultra Fund and Strategic Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Fund position performs unexpectedly, Strategic Income 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 Strategic Income will offset losses from the drop in Strategic Income's long position.| Ultra Fund vs. Ultra Fund R6 | Ultra Fund vs. Select Fund C | Ultra Fund vs. Ultra Fund R | Ultra Fund vs. Select Fund R |
| Strategic Income vs. The Hartford Emerging | Strategic Income vs. Shelton Emerging Markets | Strategic Income vs. Morgan Stanley Emerging | Strategic Income vs. Locorr Market Trend |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |