Correlation Between IShares Oil and Ultimus Managers
Can any of the company-specific risk be diversified away by investing in both IShares Oil 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 IShares Oil and Ultimus Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Oil Equipment and Ultimus Managers Trust, you can compare the effects of market volatilities on IShares Oil 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 IShares Oil with a short position of Ultimus Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Oil and Ultimus Managers.
Diversification Opportunities for IShares Oil and Ultimus Managers
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Ultimus is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding iShares Oil Equipment 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 IShares Oil 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 iShares Oil Equipment 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 IShares Oil i.e., IShares Oil and Ultimus Managers go up and down completely randomly.
Pair Corralation between IShares Oil and Ultimus Managers
Considering the 90-day investment horizon iShares Oil Equipment is expected to generate 1.09 times more return on investment than Ultimus Managers. However, IShares Oil is 1.09 times more volatile than Ultimus Managers Trust. It trades about 0.88 of its potential returns per unit of risk. Ultimus Managers Trust is currently generating about 0.38 per unit of risk. If you would invest 1,910 in iShares Oil Equipment on October 24, 2024 and sell it today you would earn a total of 310.00 from holding iShares Oil Equipment or generate 16.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
iShares Oil Equipment vs. Ultimus Managers Trust
Performance |
| Timeline |
| iShares Oil Equipment |
| Ultimus Managers Trust |
IShares Oil and Ultimus Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Oil and Ultimus Managers
The main advantage of trading using opposite IShares Oil and Ultimus Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Oil 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.| IShares Oil vs. Ultimus Managers Trust | IShares Oil vs. American Beacon Select | IShares Oil vs. Direxion Daily Regional | IShares Oil 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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