Correlation Between BlackRock ETF and Ultimus Managers

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

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

Diversification Opportunities for BlackRock ETF and Ultimus Managers

-0.03

Correlation Coefficient

BlackRock ETF  Ultimus Managers

Good diversification

The 3 months correlation between BlackRock and Ultimus is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock ETF Trust 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 BlackRock ETF 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 BlackRock ETF Trust 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 BlackRock ETF i.e., BlackRock ETF and Ultimus Managers go up and down completely randomly.

Pair Corralation between BlackRock ETF and Ultimus Managers

Considering the 90-day investment horizon BlackRock ETF Trust is expected to generate 1.46 times more return on investment than Ultimus Managers. However, BlackRock ETF is 1.46 times more volatile than Ultimus Managers Trust. It trades about 0.05 of its potential returns per unit of risk. Ultimus Managers Trust is currently generating about 0.07 per unit of risk. If you would invest  2,571  in BlackRock ETF Trust on September 12, 2024 and sell it today you would earn a total of  29.00  from holding BlackRock ETF Trust or generate 1.13% return on investment over 90 days.

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

BlackRock ETF Trust  vs.  Ultimus Managers Trust

BlackRock ETF Trust

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock ETF Trust are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent technical and fundamental indicators, BlackRock ETF may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ultimus Managers Trust

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ultimus Managers Trust are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Ultimus Managers may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with BlackRock ETF and Ultimus Managers

The main advantage of trading using opposite BlackRock ETF and Ultimus Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock ETF 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 BlackRock ETF Trust 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.