Correlation Between Nasdaq-100 Fund and Ultra Fund

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Can any of the company-specific risk be diversified away by investing in both Nasdaq-100 Fund and Ultra Fund 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 Nasdaq-100 Fund and Ultra Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Fund Class and Ultra Fund Investor, you can compare the effects of market volatilities on Nasdaq-100 Fund and Ultra Fund 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 Nasdaq-100 Fund with a short position of Ultra Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100 Fund and Ultra Fund.

Diversification Opportunities for Nasdaq-100 Fund and Ultra Fund

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Nasdaq-100 and Ultra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Fund Class and Ultra Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Fund Investor and Nasdaq-100 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 Nasdaq 100 Fund Class are associated (or correlated) with Ultra Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra Fund Investor has no effect on the direction of Nasdaq-100 Fund i.e., Nasdaq-100 Fund and Ultra Fund go up and down completely randomly.

Pair Corralation between Nasdaq-100 Fund and Ultra Fund

If you would invest  8,500  in Ultra Fund Investor on September 7, 2024 and sell it today you would earn a total of  1,447  from holding Ultra Fund Investor or generate 17.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy1.59%
ValuesDaily Returns

Nasdaq 100 Fund Class  vs.  Ultra Fund Investor

 Performance 
       Timeline  
Nasdaq 100 Fund 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Solid
Over the last 90 days Nasdaq 100 Fund Class has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Nasdaq-100 Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Ultra Fund Investor 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Ultra Fund Investor are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ultra Fund showed solid returns over the last few months and may actually be approaching a breakup point.

Nasdaq-100 Fund and Ultra Fund Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nasdaq-100 Fund and Ultra Fund

The main advantage of trading using opposite Nasdaq-100 Fund and Ultra Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100 Fund position performs unexpectedly, Ultra Fund 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 Ultra Fund will offset losses from the drop in Ultra Fund's long position.
The idea behind Nasdaq 100 Fund Class and Ultra Fund Investor pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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