Correlation Between Ultimus Managers and American High-income
Can any of the company-specific risk be diversified away by investing in both Ultimus Managers and American High-income 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 Ultimus Managers and American High-income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultimus Managers Trust and American High Income Municipal, you can compare the effects of market volatilities on Ultimus Managers and American High-income 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 Ultimus Managers with a short position of American High-income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultimus Managers and American High-income.
Diversification Opportunities for Ultimus Managers and American High-income
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ultimus and American is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ultimus Managers Trust and American High Income Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American High Income and Ultimus Managers 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 Ultimus Managers Trust are associated (or correlated) with American High-income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American High Income has no effect on the direction of Ultimus Managers i.e., Ultimus Managers and American High-income go up and down completely randomly.
Pair Corralation between Ultimus Managers and American High-income
Assuming the 90 days horizon Ultimus Managers Trust is expected to generate 4.89 times more return on investment than American High-income. However, Ultimus Managers is 4.89 times more volatile than American High Income Municipal. It trades about 0.1 of its potential returns per unit of risk. American High Income Municipal is currently generating about 0.16 per unit of risk. If you would invest 1,655 in Ultimus Managers Trust on September 4, 2024 and sell it today you would earn a total of 554.00 from holding Ultimus Managers Trust or generate 33.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Ultimus Managers Trust vs. American High Income Municipal
Performance |
| Timeline |
| Ultimus Managers Trust |
| American High Income |
Ultimus Managers and American High-income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultimus Managers and American High-income
The main advantage of trading using opposite Ultimus Managers and American High-income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultimus Managers position performs unexpectedly, American High-income 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 American High-income will offset losses from the drop in American High-income's long position.| Ultimus Managers vs. T Rowe Price | Ultimus Managers vs. Hood River New | Ultimus Managers vs. T Rowe Price | Ultimus Managers vs. T Rowe Price |
| American High-income vs. T Rowe Price | American High-income vs. Aqr Managed Futures | American High-income vs. Ab Bond Inflation | American High-income vs. Western Asset Inflation |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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