Correlation Between Ultra Fund and Collegeadvantage

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

By analyzing existing cross correlation between Ultra Fund A and Collegeadvantage 529 Savings, you can compare the effects of market volatilities on Ultra Fund and Collegeadvantage 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 Fund with a short position of Collegeadvantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Fund and Collegeadvantage.

Diversification Opportunities for Ultra Fund and Collegeadvantage

0.75

Correlation Coefficient

Ultra Fund  Collegeadvantage

Poor diversification

The 3 months correlation between Ultra and Collegeadvantage is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Fund A and Collegeadvantage 529 Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collegeadvantage 529 and Ultra Fund 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 Fund A are associated (or correlated) with Collegeadvantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collegeadvantage 529 has no effect on the direction of Ultra Fund i.e., Ultra Fund and Collegeadvantage go up and down completely randomly.

Pair Corralation between Ultra Fund and Collegeadvantage

Assuming the 90 days horizon Ultra Fund A is expected to generate 2.13 times more return on investment than Collegeadvantage. However, Ultra Fund is 2.13 times more volatile than Collegeadvantage 529 Savings. It trades about 0.21 of its potential returns per unit of risk. Collegeadvantage 529 Savings is currently generating about 0.24 per unit of risk. If you would invest  7,775  in Ultra Fund A on May 6, 2025 and sell it today you would earn a total of  1,000.00  from holding Ultra Fund A or generate 12.86% return on investment over 90 days.

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

Ultra Fund A  vs.  Collegeadvantage 529 Savings

Ultra Fund A

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ultra Fund A are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ultra Fund may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Collegeadvantage 529

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Collegeadvantage 529 Savings are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Collegeadvantage may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Ultra Fund and Collegeadvantage

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

The idea behind Ultra Fund A and Collegeadvantage 529 Savings 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.