Correlation Between Applied Opt and Ultra Clean
Can any of the company-specific risk be diversified away by investing in both Applied Opt 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 Applied Opt and Ultra Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Opt and Ultra Clean Holdings, you can compare the effects of market volatilities on Applied Opt 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 Applied Opt with a short position of Ultra Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Opt and Ultra Clean.
Diversification Opportunities for Applied Opt and Ultra Clean
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Applied and Ultra is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Applied Opt 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 Applied Opt 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 Applied Opt 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 Applied Opt i.e., Applied Opt and Ultra Clean go up and down completely randomly.
Pair Corralation between Applied Opt and Ultra Clean
Given the investment horizon of 90 days Applied Opt is expected to under-perform the Ultra Clean. In addition to that, Applied Opt is 2.45 times more volatile than Ultra Clean Holdings. It trades about -0.16 of its total potential returns per unit of risk. Ultra Clean Holdings is currently generating about 0.02 per unit of volatility. If you would invest 3,595 in Ultra Clean Holdings on November 1, 2024 and sell it today you would earn a total of 4.50 from holding Ultra Clean Holdings or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Opt vs. Ultra Clean Holdings
Performance |
| Timeline |
| Applied Opt |
| Ultra Clean Holdings |
Applied Opt and Ultra Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Opt and Ultra Clean
The main advantage of trading using opposite Applied Opt and Ultra Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Opt 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.| Applied Opt vs. Lumentum Holdings | Applied Opt vs. Ichor Holdings | Applied Opt vs. Fabrinet | Applied Opt vs. Hello Group |
| Ultra Clean vs. Diodes Incorporated | Ultra Clean vs. Daqo New Energy | Ultra Clean vs. Micron Technology | Ultra Clean vs. MagnaChip Semiconductor |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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