Correlation Between AM EAGLE and Ultra Clean
Can any of the company-specific risk be diversified away by investing in both AM EAGLE 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 AM EAGLE and Ultra Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AM EAGLE OUTFITTERS and Ultra Clean Holdings, you can compare the effects of market volatilities on AM EAGLE 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 AM EAGLE with a short position of Ultra Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of AM EAGLE and Ultra Clean.
Diversification Opportunities for AM EAGLE and Ultra Clean
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AFG and Ultra is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS 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 AM EAGLE 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 AM EAGLE OUTFITTERS 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 AM EAGLE i.e., AM EAGLE and Ultra Clean go up and down completely randomly.
Pair Corralation between AM EAGLE and Ultra Clean
Assuming the 90 days trading horizon AM EAGLE is expected to generate 1.15 times less return on investment than Ultra Clean. But when comparing it to its historical volatility, AM EAGLE OUTFITTERS is 1.08 times less risky than Ultra Clean. It trades about 0.03 of its potential returns per unit of risk. Ultra Clean Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,946 in Ultra Clean Holdings on October 14, 2024 and sell it today you would earn a total of 754.00 from holding Ultra Clean Holdings or generate 25.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AM EAGLE OUTFITTERS vs. Ultra Clean Holdings
Performance |
| Timeline |
| AM EAGLE OUTFITTERS |
| Ultra Clean Holdings |
AM EAGLE and Ultra Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AM EAGLE and Ultra Clean
The main advantage of trading using opposite AM EAGLE and Ultra Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AM EAGLE 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.| AM EAGLE vs. Ryanair Holdings plc | AM EAGLE vs. UNIVERSAL MUSIC GROUP | AM EAGLE vs. DELTA AIR LINES | AM EAGLE vs. SEALED AIR |
| Ultra Clean vs. Yuexiu Transport Infrastructure | Ultra Clean vs. Urban Outfitters | Ultra Clean vs. AM EAGLE OUTFITTERS | Ultra Clean vs. FIREWEED METALS P |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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