Correlation Between Ultrashort Small-cap and Ultrashort Duration

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

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

Diversification Opportunities for Ultrashort Small-cap and Ultrashort Duration

0.0

Correlation Coefficient

Ultrashort Small-cap  Ultrashort Duration

Pay attention - limited upside

The 3 months correlation between Ultrashort and Ultrashort is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ultrashort Small Cap Profund and Ultrashort Duration Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrashort Duration and Ultrashort Small-cap 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 Ultrashort Small Cap Profund are associated (or correlated) with Ultrashort Duration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrashort Duration has no effect on the direction of Ultrashort Small-cap i.e., Ultrashort Small-cap and Ultrashort Duration go up and down completely randomly.

Pair Corralation between Ultrashort Small-cap and Ultrashort Duration

If you would invest (100.00) in Ultrashort Duration Government on May 18, 2025 and sell it today you would earn a total of  100.00  from holding Ultrashort Duration Government or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ultrashort Small Cap Profund  vs.  Ultrashort Duration Government

Ultrashort Small Cap

Risk-Adjusted Performance

Weakest

Over the last 90 days Ultrashort Small Cap Profund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Ultrashort Duration

Risk-Adjusted Performance

Weakest

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

Pair Trading with Ultrashort Small-cap and Ultrashort Duration

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

The idea behind Ultrashort Small Cap Profund and Ultrashort Duration Government 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.