Correlation Between Ultimus Managers and Horizon Kinetics

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

Diversification Opportunities for Ultimus Managers and Horizon Kinetics

-0.07

Correlation Coefficient

Ultimus Managers  Horizon Kinetics

Good diversification

The 3 months correlation between Ultimus and Horizon is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ultimus Managers Trust and Horizon Kinetics Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Kinetics Medical 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 Horizon Kinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Kinetics Medical has no effect on the direction of Ultimus Managers i.e., Ultimus Managers and Horizon Kinetics go up and down completely randomly.

Pair Corralation between Ultimus Managers and Horizon Kinetics

Given the investment horizon of 90 days Ultimus Managers is expected to generate 1.45 times less return on investment than Horizon Kinetics. In addition to that, Ultimus Managers is 1.2 times more volatile than Horizon Kinetics Medical. It trades about 0.06 of its total potential returns per unit of risk. Horizon Kinetics Medical is currently generating about 0.11 per unit of volatility. If you would invest  2,612  in Horizon Kinetics Medical on December 30, 2024 and sell it today you would earn a total of  152.00  from holding Horizon Kinetics Medical or generate 5.82% return on investment over 90 days.

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

Ultimus Managers Trust  vs.  Horizon Kinetics Medical

Ultimus Managers Trust

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ultimus Managers Trust are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Ultimus Managers is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Horizon Kinetics Medical

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Kinetics Medical are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, Horizon Kinetics is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ultimus Managers and Horizon Kinetics

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

The idea behind Ultimus Managers Trust and Horizon Kinetics Medical 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.