Correlation Between Rising Rates and Utilities Ultrasector
Can any of the company-specific risk be diversified away by investing in both Rising Rates and Utilities Ultrasector 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 Rising Rates and Utilities Ultrasector into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rising Rates Opportunity and Utilities Ultrasector Profund, you can compare the effects of market volatilities on Rising Rates and Utilities Ultrasector 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 Rising Rates with a short position of Utilities Ultrasector. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rising Rates and Utilities Ultrasector.
Diversification Opportunities for Rising Rates and Utilities Ultrasector
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rising and Utilities is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Rising Rates Opportunity and Utilities Ultrasector Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utilities Ultrasector and Rising Rates 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 Rising Rates Opportunity are associated (or correlated) with Utilities Ultrasector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utilities Ultrasector has no effect on the direction of Rising Rates i.e., Rising Rates and Utilities Ultrasector go up and down completely randomly.
Pair Corralation between Rising Rates and Utilities Ultrasector
Assuming the 90 days horizon Rising Rates Opportunity is expected to under-perform the Utilities Ultrasector. But the mutual fund apears to be less risky and, when comparing its historical volatility, Rising Rates Opportunity is 1.41 times less risky than Utilities Ultrasector. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Utilities Ultrasector Profund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 7,428 in Utilities Ultrasector Profund on June 7, 2025 and sell it today you would earn a total of 494.00 from holding Utilities Ultrasector Profund or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rising Rates Opportunity vs. Utilities Ultrasector Profund
Performance |
| Timeline |
| Rising Rates Opportunity |
| Utilities Ultrasector |
Rising Rates and Utilities Ultrasector Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rising Rates and Utilities Ultrasector
The main advantage of trading using opposite Rising Rates and Utilities Ultrasector positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rising Rates position performs unexpectedly, Utilities Ultrasector 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 Utilities Ultrasector will offset losses from the drop in Utilities Ultrasector's long position.| Rising Rates vs. Ultrasmall Cap Profund Ultrasmall Cap | Rising Rates vs. Mutual Of America | Rising Rates vs. Valic Company I | Rising Rates vs. Fpa Queens Road |
| Utilities Ultrasector vs. Short Real Estate | Utilities Ultrasector vs. Short Real Estate | Utilities Ultrasector vs. Ultrashort Mid Cap Profund | Utilities Ultrasector vs. Ultrashort Mid Cap Profund |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |