Correlation Between Ultimus Managers and KraneShares Global

Can any of the company-specific risk be diversified away by investing in both Ultimus Managers and KraneShares Global 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 KraneShares Global 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 KraneShares Global Carbon, you can compare the effects of market volatilities on Ultimus Managers and KraneShares Global 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 KraneShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultimus Managers and KraneShares Global.

Diversification Opportunities for Ultimus Managers and KraneShares Global

0.61

Correlation Coefficient

Ultimus Managers  KraneShares Global

Poor diversification

The 3 months correlation between Ultimus and KraneShares is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ultimus Managers Trust and KraneShares Global Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Global Carbon 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 KraneShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Global Carbon has no effect on the direction of Ultimus Managers i.e., Ultimus Managers and KraneShares Global go up and down completely randomly.

Pair Corralation between Ultimus Managers and KraneShares Global

Given the investment horizon of 90 days Ultimus Managers Trust is expected to generate 0.73 times more return on investment than KraneShares Global. However, Ultimus Managers Trust is 1.37 times less risky than KraneShares Global. It trades about 0.01 of its potential returns per unit of risk. KraneShares Global Carbon is currently generating about -0.02 per unit of risk. If you would invest  2,692  in Ultimus Managers Trust on December 4, 2024 and sell it today you would earn a total of  7.00  from holding Ultimus Managers Trust or generate 0.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Ultimus Managers Trust  vs.  KraneShares Global Carbon

Ultimus Managers Trust

Risk-Adjusted Performance

Weak

Over the last 90 days Ultimus Managers Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ultimus Managers is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

KraneShares Global Carbon

Risk-Adjusted Performance

Very Weak

Over the last 90 days KraneShares Global Carbon has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, KraneShares Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ultimus Managers and KraneShares Global

The main advantage of trading using opposite Ultimus Managers and KraneShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultimus Managers position performs unexpectedly, KraneShares Global 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 KraneShares Global will offset losses from the drop in KraneShares Global's long position.

The idea behind Ultimus Managers Trust and KraneShares Global Carbon 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..