Correlation Between Baillie Gifford and Ultimus Managers

Can any of the company-specific risk be diversified away by investing in both Baillie Gifford 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 Baillie Gifford and Ultimus Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Baillie Gifford Health and Ultimus Managers Trust, you can compare the effects of market volatilities on Baillie Gifford 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 Baillie Gifford with a short position of Ultimus Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Ultimus Managers.

Diversification Opportunities for Baillie Gifford and Ultimus Managers

-0.33

Correlation Coefficient

Baillie Gifford  Ultimus Managers

Very good diversification

The 3 months correlation between Baillie and Ultimus is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health 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 Baillie Gifford 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 Baillie Gifford Health 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 Baillie Gifford i.e., Baillie Gifford and Ultimus Managers go up and down completely randomly.

Pair Corralation between Baillie Gifford and Ultimus Managers

Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Ultimus Managers. In addition to that, Baillie Gifford is 1.55 times more volatile than Ultimus Managers Trust. It trades about -0.03 of its total potential returns per unit of risk. Ultimus Managers Trust is currently generating about 0.12 per unit of volatility. If you would invest  1,218  in Ultimus Managers Trust on September 4, 2024 and sell it today you would earn a total of  44.00  from holding Ultimus Managers Trust or generate 3.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

Baillie Gifford Health  vs.  Ultimus Managers Trust

Baillie Gifford Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baillie Gifford Health has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Baillie Gifford is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ultimus Managers Trust

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ultimus Managers Trust are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Ultimus Managers may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Baillie Gifford and Ultimus Managers

The main advantage of trading using opposite Baillie Gifford and Ultimus Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford 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.

The idea behind Baillie Gifford Health and Ultimus Managers Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.