Correlation Between Ultramid-cap Profund and Bear Profund

Can any of the company-specific risk be diversified away by investing in both Ultramid-cap Profund and Bear Profund 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 Ultramid-cap Profund and Bear Profund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ultramid Cap Profund Ultramid Cap and Bear Profund Bear, you can compare the effects of market volatilities on Ultramid-cap Profund and Bear Profund 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 Ultramid-cap Profund with a short position of Bear Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultramid-cap Profund and Bear Profund.

Diversification Opportunities for Ultramid-cap Profund and Bear Profund

-0.95

Correlation Coefficient

Ultramid-cap Profund  Bear Profund

Pay attention - limited upside

The 3 months correlation between Ultramid-cap and Bear is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ultramid Cap Profund Ultramid and Bear Profund Bear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bear Profund Bear and Ultramid-cap Profund 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 Ultramid Cap Profund Ultramid Cap are associated (or correlated) with Bear Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bear Profund Bear has no effect on the direction of Ultramid-cap Profund i.e., Ultramid-cap Profund and Bear Profund go up and down completely randomly.

Pair Corralation between Ultramid-cap Profund and Bear Profund

Assuming the 90 days horizon Ultramid Cap Profund Ultramid Cap is expected to generate 2.63 times more return on investment than Bear Profund. However, Ultramid-cap Profund is 2.63 times more volatile than Bear Profund Bear. It trades about 0.09 of its potential returns per unit of risk. Bear Profund Bear is currently generating about -0.11 per unit of risk. If you would invest  5,233  in Ultramid Cap Profund Ultramid Cap on September 4, 2024 and sell it today you would earn a total of  2,572  from holding Ultramid Cap Profund Ultramid Cap or generate 49.15% return on investment over 90 days.

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

Ultramid Cap Profund Ultramid   vs.  Bear Profund Bear

Ultramid Cap Profund

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ultramid Cap Profund Ultramid Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Ultramid-cap Profund showed solid returns over the last few months and may actually be approaching a breakup point.

Bear Profund Bear

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bear Profund Bear has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Ultramid-cap Profund and Bear Profund

The main advantage of trading using opposite Ultramid-cap Profund and Bear Profund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultramid-cap Profund position performs unexpectedly, Bear Profund 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 Bear Profund will offset losses from the drop in Bear Profund's long position.

The idea behind Ultramid Cap Profund Ultramid Cap and Bear Profund Bear 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.