Correlation Between Ultimus Managers and Tradr 2X

Can any of the company-specific risk be diversified away by investing in both Ultimus Managers and Tradr 2X 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 Tradr 2X 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 Tradr 2X Long, you can compare the effects of market volatilities on Ultimus Managers and Tradr 2X 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 Tradr 2X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultimus Managers and Tradr 2X.

Diversification Opportunities for Ultimus Managers and Tradr 2X

0.31

Correlation Coefficient

Ultimus Managers  Tradr 2X

Weak diversification

The 3 months correlation between Ultimus and Tradr is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ultimus Managers Trust and Tradr 2X Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradr 2X Long 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 Tradr 2X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradr 2X Long has no effect on the direction of Ultimus Managers i.e., Ultimus Managers and Tradr 2X go up and down completely randomly.

Pair Corralation between Ultimus Managers and Tradr 2X

Given the investment horizon of 90 days Ultimus Managers is expected to generate 2.13 times less return on investment than Tradr 2X. But when comparing it to its historical volatility, Ultimus Managers Trust is 3.05 times less risky than Tradr 2X. It trades about 0.06 of its potential returns per unit of risk. Tradr 2X Long is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,155  in Tradr 2X Long on December 29, 2024 and sell it today you would earn a total of  81.00  from holding Tradr 2X Long or generate 3.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	68.85%
Values	Daily Returns

Ultimus Managers Trust  vs.  Tradr 2X Long

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.

Tradr 2X Long

Risk-Adjusted Performance

Insignificant

Over the last 90 days Tradr 2X Long has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very abnormal basic indicators, Tradr 2X may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ultimus Managers and Tradr 2X

The main advantage of trading using opposite Ultimus Managers and Tradr 2X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultimus Managers position performs unexpectedly, Tradr 2X 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 Tradr 2X will offset losses from the drop in Tradr 2X's long position.

The idea behind Ultimus Managers Trust and Tradr 2X Long 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.