Correlation Between IShares Core and Ultra Fund

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

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

Diversification Opportunities for IShares Core and Ultra Fund

0.0

Correlation Coefficient

IShares Core  Ultra Fund

Pay attention - limited upside

The 3 months correlation between IShares and Ultra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Ultra Fund R in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Fund R and IShares Core 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 iShares Core SP 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 R has no effect on the direction of IShares Core i.e., IShares Core and Ultra Fund go up and down completely randomly.

Pair Corralation between IShares Core and Ultra Fund

If you would invest  50,796  in iShares Core SP on March 5, 2024 and sell it today you would earn a total of  2,200  from holding iShares Core SP or generate 4.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

iShares Core SP  vs.  Ultra Fund R

iShares Core SP

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core SP are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, IShares Core is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Ultra Fund R

Risk-Adjusted Performance

0 of 100

Insignificant

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

Pair Trading with IShares Core and Ultra Fund

The main advantage of trading using opposite IShares Core and Ultra Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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 iShares Core SP and Ultra Fund R 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .