Correlation Between Green Century and Ultra Fund
Can any of the company-specific risk be diversified away by investing in both Green Century 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 Green Century and Ultra Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Century Equity and Ultra Fund Y, you can compare the effects of market volatilities on Green Century 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 Green Century with a short position of Ultra Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Century and Ultra Fund.
Diversification Opportunities for Green Century and Ultra Fund
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Green and Ultra is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Green Century Equity and Ultra Fund Y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Fund Y and Green Century 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 Green Century Equity 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 Y has no effect on the direction of Green Century i.e., Green Century and Ultra Fund go up and down completely randomly.
Pair Corralation between Green Century and Ultra Fund
Assuming the 90 days horizon Green Century Equity is expected to generate 0.79 times more return on investment than Ultra Fund. However, Green Century Equity is 1.27 times less risky than Ultra Fund. It trades about -0.21 of its potential returns per unit of risk. Ultra Fund Y is currently generating about -0.18 per unit of risk. If you would invest 8,254 in Green Century Equity on January 26, 2024 and sell it today you would lose (305.00) from holding Green Century Equity or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Century Equity vs. Ultra Fund Y
Performance |
| Timeline |
| Green Century Equity |
| Ultra Fund Y |
Green Century and Ultra Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Century and Ultra Fund
The main advantage of trading using opposite Green Century and Ultra Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Century 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.| Green Century vs. Amana Income Fund | Green Century vs. Amana Income Fund | Green Century vs. Amana Developing World | Green Century vs. Amana Developing World |
| Ultra Fund vs. Amana Income Fund | Ultra Fund vs. Amana Income Fund | Ultra Fund vs. Amana Developing World | Ultra Fund vs. Amana Developing World |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |