Correlation Between KAUFMAN ET and Ultra Clean
Can any of the company-specific risk be diversified away by investing in both KAUFMAN ET 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 KAUFMAN ET and Ultra Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KAUFMAN ET BROAD and Ultra Clean Holdings, you can compare the effects of market volatilities on KAUFMAN ET 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 KAUFMAN ET with a short position of Ultra Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAUFMAN ET and Ultra Clean.
Diversification Opportunities for KAUFMAN ET and Ultra Clean
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KAUFMAN and Ultra is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding KAUFMAN ET BROAD and Ultra Clean Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Clean Holdings and KAUFMAN ET 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 KAUFMAN ET BROAD 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 Holdings has no effect on the direction of KAUFMAN ET i.e., KAUFMAN ET and Ultra Clean go up and down completely randomly.
Pair Corralation between KAUFMAN ET and Ultra Clean
Assuming the 90 days trading horizon KAUFMAN ET BROAD is expected to under-perform the Ultra Clean. But the stock apears to be less risky and, when comparing its historical volatility, KAUFMAN ET BROAD is 3.15 times less risky than Ultra Clean. The stock trades about -0.3 of its potential returns per unit of risk. The Ultra Clean Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,520 in Ultra Clean Holdings on August 29, 2024 and sell it today you would earn a total of 80.00 from holding Ultra Clean Holdings or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAUFMAN ET BROAD vs. Ultra Clean Holdings
Performance |
| Timeline |
| KAUFMAN ET BROAD |
| Ultra Clean Holdings |
KAUFMAN ET and Ultra Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAUFMAN ET and Ultra Clean
The main advantage of trading using opposite KAUFMAN ET and Ultra Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAUFMAN ET 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.| KAUFMAN ET vs. NEWELL RUBBERMAID | KAUFMAN ET vs. SWISS WATER DECAFFCOFFEE | KAUFMAN ET vs. Compagnie Plastic Omnium | KAUFMAN ET vs. VARIOUS EATERIES LS |
| Ultra Clean vs. STMICROELECTRONICS | Ultra Clean vs. Renesas Electronics | Ultra Clean vs. Ryanair Holdings plc | Ultra Clean vs. Enter Air SA |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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