Correlation Between Frontier Mfg and Ultimus Managers
Can any of the company-specific risk be diversified away by investing in both Frontier Mfg 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 Frontier Mfg and Ultimus Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frontier Mfg Global and Ultimus Managers Trust, you can compare the effects of market volatilities on Frontier Mfg 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 Frontier Mfg with a short position of Ultimus Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontier Mfg and Ultimus Managers.
Diversification Opportunities for Frontier Mfg and Ultimus Managers
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Frontier and Ultimus is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Mfg Global 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 Frontier Mfg 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 Frontier Mfg Global 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 Frontier Mfg i.e., Frontier Mfg and Ultimus Managers go up and down completely randomly.
Pair Corralation between Frontier Mfg and Ultimus Managers
Assuming the 90 days horizon Frontier Mfg is expected to generate 18.75 times less return on investment than Ultimus Managers. But when comparing it to its historical volatility, Frontier Mfg Global is 2.05 times less risky than Ultimus Managers. It trades about 0.05 of its potential returns per unit of risk. Ultimus Managers Trust is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 2,000 in Ultimus Managers Trust on September 2, 2024 and sell it today you would earn a total of 210.00 from holding Ultimus Managers Trust or generate 10.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frontier Mfg Global vs. Ultimus Managers Trust
Performance |
| Timeline |
| Frontier Mfg Global |
| Ultimus Managers Trust |
Frontier Mfg and Ultimus Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontier Mfg and Ultimus Managers
The main advantage of trading using opposite Frontier Mfg and Ultimus Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontier Mfg 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.| Frontier Mfg vs. Frontier Mfg E | Frontier Mfg vs. Frontier Mfg E | Frontier Mfg vs. Frontier Mfg Global | Frontier Mfg vs. Calamos Antetokounmpo Sustainable |
| Ultimus Managers vs. Pgim Jennison Technology | Ultimus Managers vs. Columbia Global Technology | Ultimus Managers vs. Technology Ultrasector Profund | Ultimus Managers vs. Science Technology Fund |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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