Correlation Between Themes Global and Ultimus Managers
Can any of the company-specific risk be diversified away by investing in both Themes Global 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 Themes Global and Ultimus Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Themes Global Systemically and Ultimus Managers Trust, you can compare the effects of market volatilities on Themes Global 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 Themes Global with a short position of Ultimus Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Themes Global and Ultimus Managers.
Diversification Opportunities for Themes Global and Ultimus Managers
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Themes and Ultimus is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Themes Global Systemically 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 Themes Global 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 Themes Global Systemically 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 Themes Global i.e., Themes Global and Ultimus Managers go up and down completely randomly.
Pair Corralation between Themes Global and Ultimus Managers
Given the investment horizon of 90 days Themes Global is expected to generate 1.91 times less return on investment than Ultimus Managers. But when comparing it to its historical volatility, Themes Global Systemically is 1.2 times less risky than Ultimus Managers. It trades about 0.19 of its potential returns per unit of risk. Ultimus Managers Trust is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 2,592 in Ultimus Managers Trust on September 4, 2024 and sell it today you would earn a total of 173.00 from holding Ultimus Managers Trust or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Themes Global Systemically vs. Ultimus Managers Trust
Performance |
| Timeline |
| Themes Global System |
| Ultimus Managers Trust |
Themes Global and Ultimus Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Themes Global and Ultimus Managers
The main advantage of trading using opposite Themes Global and Ultimus Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Themes Global 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.| Themes Global vs. Ultimus Managers Trust | Themes Global vs. American Beacon Select | Themes Global vs. Direxion Daily Regional | Themes Global vs. Direxion Daily SP |
| Ultimus Managers vs. American Beacon Select | Ultimus Managers vs. Direxion Daily Regional | Ultimus Managers vs. Direxion Daily SP | Ultimus Managers vs. EA Series Trust |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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