Correlation Between Weitz Ultra and Core Plus

Can any of the company-specific risk be diversified away by investing in both Weitz Ultra and Core Plus 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 Weitz Ultra and Core Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Weitz Ultra Short and Core Plus Income, you can compare the effects of market volatilities on Weitz Ultra and Core Plus 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 Weitz Ultra with a short position of Core Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weitz Ultra and Core Plus.

Diversification Opportunities for Weitz Ultra and Core Plus

-0.13

Correlation Coefficient

Weitz Ultra  Core Plus

Good diversification

The 3 months correlation between Weitz and Core is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Weitz Ultra Short and Core Plus Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Plus Income and Weitz Ultra 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 Weitz Ultra Short are associated (or correlated) with Core Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Plus Income has no effect on the direction of Weitz Ultra i.e., Weitz Ultra and Core Plus go up and down completely randomly.

Pair Corralation between Weitz Ultra and Core Plus

Assuming the 90 days horizon Weitz Ultra is expected to generate 1.12 times less return on investment than Core Plus. But when comparing it to its historical volatility, Weitz Ultra Short is 3.35 times less risky than Core Plus. It trades about 0.25 of its potential returns per unit of risk. Core Plus Income is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  850.00  in Core Plus Income on October 22, 2024 and sell it today you would earn a total of  102.00  from holding Core Plus Income or generate 12.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Weitz Ultra Short  vs.  Core Plus Income

Weitz Ultra Short

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Weitz Ultra Short are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Weitz Ultra is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Core Plus Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Core Plus Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Core Plus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Weitz Ultra and Core Plus

The main advantage of trading using opposite Weitz Ultra and Core Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weitz Ultra position performs unexpectedly, Core Plus 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 Core Plus will offset losses from the drop in Core Plus' long position.

The idea behind Weitz Ultra Short and Core Plus Income 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.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.