Correlation Between Ultra Fund and High Yield
Can any of the company-specific risk be diversified away by investing in both Ultra Fund and High Yield 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 High Yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultra Fund Investor and High Yield Fund Investor, you can compare the effects of market volatilities on Ultra Fund and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Fund and High Yield.
Diversification Opportunities for Ultra Fund and High Yield
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ultra and High is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Fund Investor and High Yield Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund 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 Investor are associated (or correlated) with High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Ultra Fund i.e., Ultra Fund and High Yield go up and down completely randomly.
Pair Corralation between Ultra Fund and High Yield
Assuming the 90 days horizon Ultra Fund Investor is expected to generate 4.56 times more return on investment than High Yield. However, Ultra Fund is 4.56 times more volatile than High Yield Fund Investor. It trades about 0.15 of its potential returns per unit of risk. High Yield Fund Investor is currently generating about 0.22 per unit of risk. If you would invest 9,224 in Ultra Fund Investor on June 4, 2025 and sell it today you would earn a total of 676.00 from holding Ultra Fund Investor or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Fund Investor vs. High Yield Fund Investor
Performance |
| Timeline |
| Ultra Fund Investor |
| High Yield Fund |
Ultra Fund and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Fund and High Yield
The main advantage of trading using opposite Ultra Fund and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Fund position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Ultra Fund vs. Growth Fund Investor | Ultra Fund vs. Select Fund Investor | Ultra Fund vs. International Growth Fund | Ultra Fund vs. Heritage Fund Investor |
| High Yield vs. High Yield Municipal Fund | High Yield vs. Diversified Bond Fund | High Yield vs. Ginnie Mae Fund | High Yield vs. Utilities Fund Investor |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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