Correlation Between Ultra Fund and Focused International
Can any of the company-specific risk be diversified away by investing in both Ultra Fund and Focused International 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 Focused International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultra Fund I and Focused International Growth, you can compare the effects of market volatilities on Ultra Fund and Focused International 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 Focused International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Fund and Focused International.
Diversification Opportunities for Ultra Fund and Focused International
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ultra and Focused is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Fund I and Focused International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focused International 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 I are associated (or correlated) with Focused International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focused International has no effect on the direction of Ultra Fund i.e., Ultra Fund and Focused International go up and down completely randomly.
Pair Corralation between Ultra Fund and Focused International
Assuming the 90 days horizon Ultra Fund I is expected to generate 1.26 times more return on investment than Focused International. However, Ultra Fund is 1.26 times more volatile than Focused International Growth. It trades about 0.04 of its potential returns per unit of risk. Focused International Growth is currently generating about 0.02 per unit of risk. If you would invest 9,038 in Ultra Fund I on November 28, 2024 and sell it today you would earn a total of 675.00 from holding Ultra Fund I or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Fund I vs. Focused International Growth
Performance |
| Timeline |
| Ultra Fund I |
| Focused International |
Ultra Fund and Focused International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Fund and Focused International
The main advantage of trading using opposite Ultra Fund and Focused International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Fund position performs unexpectedly, Focused International 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 Focused International will offset losses from the drop in Focused International's long position.| Ultra Fund vs. Ultra Fund A | Ultra Fund vs. Select Fund I | Ultra Fund vs. Value Fund I | Ultra Fund vs. Income Growth Fund |
| Focused International vs. Hartford Moderate Allocation | Focused International vs. Enhanced Large Pany | Focused International vs. Upright Assets Allocation | Focused International vs. Dodge Cox Stock |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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