Correlation Between Vanguard 500 and Ultimus Managers
Can any of the company-specific risk be diversified away by investing in both Vanguard 500 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 Vanguard 500 and Ultimus Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard 500 Index and Ultimus Managers Trust, you can compare the effects of market volatilities on Vanguard 500 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 Vanguard 500 with a short position of Ultimus Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard 500 and Ultimus Managers.
Diversification Opportunities for Vanguard 500 and Ultimus Managers
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Ultimus is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard 500 Index 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 Vanguard 500 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 Vanguard 500 Index 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 Vanguard 500 i.e., Vanguard 500 and Ultimus Managers go up and down completely randomly.
Pair Corralation between Vanguard 500 and Ultimus Managers
Assuming the 90 days horizon Vanguard 500 is expected to generate 1.89 times less return on investment than Ultimus Managers. But when comparing it to its historical volatility, Vanguard 500 Index is 1.4 times less risky than Ultimus Managers. It trades about 0.34 of its potential returns per unit of risk. Ultimus Managers Trust is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 2,000 in Ultimus Managers Trust on September 2, 2024 and sell it today you would earn a total of 210.00 from holding Ultimus Managers Trust or generate 10.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard 500 Index vs. Ultimus Managers Trust
Performance |
| Timeline |
| Vanguard 500 Index |
| Ultimus Managers Trust |
Vanguard 500 and Ultimus Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard 500 and Ultimus Managers
The main advantage of trading using opposite Vanguard 500 and Ultimus Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 500 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.| Vanguard 500 vs. Vanguard Total Bond | Vanguard 500 vs. Vanguard Small Cap Index | Vanguard 500 vs. Vanguard Mid Cap Index | Vanguard 500 vs. Vanguard Extended Market |
| Ultimus Managers vs. Pgim Jennison Technology | Ultimus Managers vs. Columbia Global Technology | Ultimus Managers vs. Technology Ultrasector Profund | Ultimus Managers vs. Science Technology Fund |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |