Correlation Between Ultra-short Fixed and Deutsche Short-term
Can any of the company-specific risk be diversified away by investing in both Ultra-short Fixed and Deutsche Short-term 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-short Fixed and Deutsche Short-term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultra Short Fixed Income and Deutsche Short Term Municipal, you can compare the effects of market volatilities on Ultra-short Fixed and Deutsche Short-term 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-short Fixed with a short position of Deutsche Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra-short Fixed and Deutsche Short-term.
Diversification Opportunities for Ultra-short Fixed and Deutsche Short-term
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ultra-short and Deutsche is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Short Fixed Income and Deutsche Short Term Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Short Term and Ultra-short Fixed 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 Short Fixed Income are associated (or correlated) with Deutsche Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Short Term has no effect on the direction of Ultra-short Fixed i.e., Ultra-short Fixed and Deutsche Short-term go up and down completely randomly.
Pair Corralation between Ultra-short Fixed and Deutsche Short-term
Assuming the 90 days horizon Ultra Short Fixed Income is expected to generate 1.15 times more return on investment than Deutsche Short-term. However, Ultra-short Fixed is 1.15 times more volatile than Deutsche Short Term Municipal. It trades about 0.16 of its potential returns per unit of risk. Deutsche Short Term Municipal is currently generating about 0.12 per unit of risk. If you would invest 1,026 in Ultra Short Fixed Income on August 26, 2025 and sell it today you would earn a total of 8.00 from holding Ultra Short Fixed Income or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Short Fixed Income vs. Deutsche Short Term Municipal
Performance |
| Timeline |
| Ultra Short Fixed |
| Deutsche Short Term |
Ultra-short Fixed and Deutsche Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra-short Fixed and Deutsche Short-term
The main advantage of trading using opposite Ultra-short Fixed and Deutsche Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra-short Fixed position performs unexpectedly, Deutsche Short-term 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 Deutsche Short-term will offset losses from the drop in Deutsche Short-term's long position.| Ultra-short Fixed vs. Qs Moderate Growth | Ultra-short Fixed vs. Qs Growth Fund | Ultra-short Fixed vs. Chase Growth Fund | Ultra-short Fixed vs. Auer Growth Fund |
| Deutsche Short-term vs. Elfun Diversified Fund | Deutsche Short-term vs. Aqr Diversified Arbitrage | Deutsche Short-term vs. Massmutual Premier Diversified | Deutsche Short-term vs. Lord Abbett Diversified |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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