Correlation Between UBS AG and Ultimus Managers
Can any of the company-specific risk be diversified away by investing in both UBS AG and Ultimus Managers 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 UBS AG and Ultimus Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS AG London and Ultimus Managers Trust, you can compare the effects of market volatilities on UBS AG and Ultimus Managers 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 UBS AG with a short position of Ultimus Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS AG and Ultimus Managers.
Diversification Opportunities for UBS AG and Ultimus Managers
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UBS and Ultimus is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding UBS AG London and Ultimus Managers Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultimus Managers Trust and UBS AG 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 UBS AG London are associated (or correlated) with Ultimus Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultimus Managers Trust has no effect on the direction of UBS AG i.e., UBS AG and Ultimus Managers go up and down completely randomly.
Pair Corralation between UBS AG and Ultimus Managers
Given the investment horizon of 90 days UBS AG London is expected to generate 1.09 times more return on investment than Ultimus Managers. However, UBS AG is 1.09 times more volatile than Ultimus Managers Trust. It trades about -0.12 of its potential returns per unit of risk. Ultimus Managers Trust is currently generating about -0.21 per unit of risk. If you would invest 2,034 in UBS AG London on December 10, 2024 and sell it today you would lose (54.00) from holding UBS AG London or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS AG London vs. Ultimus Managers Trust
Performance |
| Timeline |
| UBS AG London |
| Ultimus Managers Trust |
UBS AG and Ultimus Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS AG and Ultimus Managers
The main advantage of trading using opposite UBS AG and Ultimus Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS AG position performs unexpectedly, Ultimus Managers 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 Ultimus Managers will offset losses from the drop in Ultimus Managers' long position.The idea behind UBS AG London and Ultimus Managers Trust 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.| Ultimus Managers vs. Direxion Daily SP | ||
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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