Correlation Between Ultra Fund and California Intermediate-ter
Can any of the company-specific risk be diversified away by investing in both Ultra Fund and California Intermediate-ter 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 California Intermediate-ter 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 California Intermediate Term Tax Free, you can compare the effects of market volatilities on Ultra Fund and California Intermediate-ter 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 California Intermediate-ter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Fund and California Intermediate-ter.
Diversification Opportunities for Ultra Fund and California Intermediate-ter
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ultra and California is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Fund C and California Intermediate Term T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Intermediate-ter 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 California Intermediate-ter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Intermediate-ter has no effect on the direction of Ultra Fund i.e., Ultra Fund and California Intermediate-ter go up and down completely randomly.
Pair Corralation between Ultra Fund and California Intermediate-ter
Assuming the 90 days horizon Ultra Fund C is expected to generate 8.12 times more return on investment than California Intermediate-ter. However, Ultra Fund is 8.12 times more volatile than California Intermediate Term Tax Free. It trades about 0.07 of its potential returns per unit of risk. California Intermediate Term Tax Free is currently generating about 0.08 per unit of risk. If you would invest 5,395 in Ultra Fund C on September 3, 2024 and sell it today you would earn a total of 1,178 from holding Ultra Fund C or generate 21.84% 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 C vs. California Intermediate Term T
Performance |
| Timeline |
| Ultra Fund C |
| California Intermediate-ter |
Ultra Fund and California Intermediate-ter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Fund and California Intermediate-ter
The main advantage of trading using opposite Ultra Fund and California Intermediate-ter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Fund position performs unexpectedly, California Intermediate-ter 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 California Intermediate-ter will offset losses from the drop in California Intermediate-ter'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 |
| California Intermediate-ter vs. Ppm High Yield | California Intermediate-ter vs. Guggenheim High Yield | California Intermediate-ter vs. Calvert High Yield | California Intermediate-ter vs. Gmo High Yield |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |