Correlation Between Knowles and ULTRA CLEAN
Can any of the company-specific risk be diversified away by investing in both Knowles and ULTRA CLEAN 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 Knowles and ULTRA CLEAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles and ULTRA CLEAN HLDGS, you can compare the effects of market volatilities on Knowles and ULTRA CLEAN 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 Knowles with a short position of ULTRA CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles and ULTRA CLEAN.
Diversification Opportunities for Knowles and ULTRA CLEAN
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Knowles and ULTRA is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Knowles and ULTRA CLEAN HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ULTRA CLEAN HLDGS and Knowles 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 Knowles are associated (or correlated) with ULTRA CLEAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ULTRA CLEAN HLDGS has no effect on the direction of Knowles i.e., Knowles and ULTRA CLEAN go up and down completely randomly.
Pair Corralation between Knowles and ULTRA CLEAN
Assuming the 90 days horizon Knowles is expected to generate 0.64 times more return on investment than ULTRA CLEAN. However, Knowles is 1.57 times less risky than ULTRA CLEAN. It trades about 0.06 of its potential returns per unit of risk. ULTRA CLEAN HLDGS is currently generating about -0.02 per unit of risk. If you would invest 1,610 in Knowles on September 1, 2024 and sell it today you would earn a total of 210.00 from holding Knowles or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.24% |
| Values | Daily Returns |
Knowles vs. ULTRA CLEAN HLDGS
Performance |
| Timeline |
| Knowles |
| ULTRA CLEAN HLDGS |
Knowles and ULTRA CLEAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knowles and ULTRA CLEAN
The main advantage of trading using opposite Knowles and ULTRA CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles position performs unexpectedly, ULTRA CLEAN 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 ULTRA CLEAN will offset losses from the drop in ULTRA CLEAN's long position.| Knowles vs. ULTRA CLEAN HLDGS | Knowles vs. INTERCONT HOTELS | Knowles vs. Xenia Hotels Resorts | Knowles vs. Luckin Coffee |
| ULTRA CLEAN vs. DEVRY EDUCATION GRP | ULTRA CLEAN vs. WILLIS LEASE FIN | ULTRA CLEAN vs. G8 EDUCATION | ULTRA CLEAN vs. Grand Canyon Education |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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