Correlation Between Ultimus Managers and IShares Transportation

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

Diversification Opportunities for Ultimus Managers and IShares Transportation

0.61

Correlation Coefficient

Ultimus Managers  IShares Transportation

Poor diversification

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

Pair Corralation between Ultimus Managers and IShares Transportation

Given the investment horizon of 90 days Ultimus Managers is expected to generate 1.65 times less return on investment than IShares Transportation. But when comparing it to its historical volatility, Ultimus Managers Trust is 1.7 times less risky than IShares Transportation. It trades about 0.11 of its potential returns per unit of risk. iShares Transportation Average is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  6,213  in iShares Transportation Average on May 7, 2025 and sell it today you would earn a total of  568.00  from holding iShares Transportation Average or generate 9.14% 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.  iShares Transportation Average

Ultimus Managers Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ultimus Managers Trust are ranked lower than 8 (%) 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.

iShares Transportation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Transportation Average are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, IShares Transportation may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Ultimus Managers and IShares Transportation

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

The idea behind Ultimus Managers Trust and iShares Transportation Average 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.