Correlation Between Ultra Short and Chartwell Short

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

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

Diversification Opportunities for Ultra Short and Chartwell Short

0.98

Correlation Coefficient

Ultra Short  Chartwell Short

Almost no diversification

The 3 months correlation between Ultra and Chartwell is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Short Term Fixed and Chartwell Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chartwell Short Duration and Ultra Short 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 Ultra Short Term Fixed are associated (or correlated) with Chartwell Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chartwell Short Duration has no effect on the direction of Ultra Short i.e., Ultra Short and Chartwell Short go up and down completely randomly.

Pair Corralation between Ultra Short and Chartwell Short

Assuming the 90 days horizon Ultra Short is expected to generate 1.59 times less return on investment than Chartwell Short. But when comparing it to its historical volatility, Ultra Short Term Fixed is 1.47 times less risky than Chartwell Short. It trades about 0.21 of its potential returns per unit of risk. Chartwell Short Duration is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  943.00  in Chartwell Short Duration on May 4, 2025 and sell it today you would earn a total of  14.00  from holding Chartwell Short Duration or generate 1.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Ultra Short Term Fixed  vs.  Chartwell Short Duration

Ultra Short Term

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ultra Short Term Fixed are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ultra Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Chartwell Short Duration

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chartwell Short Duration are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Chartwell Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ultra Short and Chartwell Short

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

The idea behind Ultra Short Term Fixed and Chartwell Short Duration 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.