Correlation Between Ab Small and Ultimus Managers
Can any of the company-specific risk be diversified away by investing in both Ab Small 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 Ab Small and Ultimus Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Ultimus Managers Trust, you can compare the effects of market volatilities on Ab Small 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 Ab Small with a short position of Ultimus Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Ultimus Managers.
Diversification Opportunities for Ab Small and Ultimus Managers
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QUAZX and Ultimus is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap 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 Ab Small 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 Ab Small Cap 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 Ab Small i.e., Ab Small and Ultimus Managers go up and down completely randomly.
Pair Corralation between Ab Small and Ultimus Managers
Assuming the 90 days horizon Ab Small Cap is expected to generate 1.48 times more return on investment than Ultimus Managers. However, Ab Small is 1.48 times more volatile than Ultimus Managers Trust. It trades about 0.07 of its potential returns per unit of risk. Ultimus Managers Trust is currently generating about 0.07 per unit of risk. If you would invest 5,238 in Ab Small Cap on September 12, 2024 and sell it today you would earn a total of 2,636 from holding Ab Small Cap or generate 50.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Small Cap vs. Ultimus Managers Trust
Performance |
| Timeline |
| Ab Small Cap |
| Ultimus Managers Trust |
Ab Small and Ultimus Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Ultimus Managers
The main advantage of trading using opposite Ab Small and Ultimus Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small 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.| Ab Small vs. Needham Aggressive Growth | Ab Small vs. Ultramid Cap Profund Ultramid Cap | Ab Small vs. HUMANA INC | Ab Small vs. Barloworld Ltd ADR |
| Ultimus Managers vs. Ab Small Cap | Ultimus Managers vs. Old Westbury Small | Ultimus Managers vs. Ab Small Cap | Ultimus Managers vs. Lebenthal Lisanti Small |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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