Correlation Between Air Lease and ULTRA CLEAN
Can any of the company-specific risk be diversified away by investing in both Air Lease 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 Air Lease and ULTRA CLEAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and ULTRA CLEAN HLDGS, you can compare the effects of market volatilities on Air Lease 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 Air Lease with a short position of ULTRA CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and ULTRA CLEAN.
Diversification Opportunities for Air Lease and ULTRA CLEAN
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and ULTRA is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease 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 Air Lease 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 Air Lease 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 Air Lease i.e., Air Lease and ULTRA CLEAN go up and down completely randomly.
Pair Corralation between Air Lease and ULTRA CLEAN
Assuming the 90 days trading horizon Air Lease is expected to under-perform the ULTRA CLEAN. But the stock apears to be less risky and, when comparing its historical volatility, Air Lease is 2.14 times less risky than ULTRA CLEAN. The stock trades about -0.13 of its potential returns per unit of risk. The ULTRA CLEAN HLDGS is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,560 in ULTRA CLEAN HLDGS on November 3, 2024 and sell it today you would lose (20.00) from holding ULTRA CLEAN HLDGS or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. ULTRA CLEAN HLDGS
Performance |
| Timeline |
| Air Lease |
| ULTRA CLEAN HLDGS |
Air Lease and ULTRA CLEAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and ULTRA CLEAN
The main advantage of trading using opposite Air Lease and ULTRA CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease 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.| Air Lease vs. Acadia Healthcare | Air Lease vs. EPSILON HEALTHCARE LTD | Air Lease vs. Universal Health Realty | Air Lease vs. Ares Management Corp |
| ULTRA CLEAN vs. PKSHA TECHNOLOGY INC | ULTRA CLEAN vs. Yanzhou Coal Mining | ULTRA CLEAN vs. Globex Mining Enterprises | ULTRA CLEAN vs. BioNTech SE |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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