Correlation Between Ultimus Managers and First Trust
Can any of the company-specific risk be diversified away by investing in both Ultimus Managers and First Trust 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 First Trust 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 First Trust Nasdaq, you can compare the effects of market volatilities on Ultimus Managers and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultimus Managers and First Trust.
Diversification Opportunities for Ultimus Managers and First Trust
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ultimus and First is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ultimus Managers Trust and First Trust Nasdaq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Nasdaq 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Nasdaq has no effect on the direction of Ultimus Managers i.e., Ultimus Managers and First Trust go up and down completely randomly.
Pair Corralation between Ultimus Managers and First Trust
Given the investment horizon of 90 days Ultimus Managers Trust is expected to generate 0.93 times more return on investment than First Trust. However, Ultimus Managers Trust is 1.08 times less risky than First Trust. It trades about 0.05 of its potential returns per unit of risk. First Trust Nasdaq is currently generating about -0.01 per unit of risk. If you would invest 2,749 in Ultimus Managers Trust on November 4, 2024 and sell it today you would earn a total of 30.00 from holding Ultimus Managers Trust or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultimus Managers Trust vs. First Trust Nasdaq
Performance |
| Timeline |
| Ultimus Managers Trust |
| First Trust Nasdaq |
Ultimus Managers and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultimus Managers and First Trust
The main advantage of trading using opposite Ultimus Managers and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultimus Managers position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Ultimus Managers vs. American Beacon Select | Ultimus Managers vs. First Trust Indxx | Ultimus Managers vs. Direxion Daily SP | Ultimus Managers vs. EA Series Trust |
| First Trust vs. First Trust Consumer | First Trust vs. Fidelity MSCI Consumer | First Trust vs. iShares Consumer Staples | First Trust vs. iShares Global Consumer |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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