Correlation Between Biglari Holdings and Ultra Clean
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings 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 Biglari Holdings and Ultra Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Ultra Clean Holdings, you can compare the effects of market volatilities on Biglari Holdings 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 Biglari Holdings with a short position of Ultra Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Ultra Clean.
Diversification Opportunities for Biglari Holdings and Ultra Clean
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Biglari and Ultra is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings 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 Biglari Holdings 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 Biglari Holdings 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 Biglari Holdings i.e., Biglari Holdings and Ultra Clean go up and down completely randomly.
Pair Corralation between Biglari Holdings and Ultra Clean
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 0.97 times more return on investment than Ultra Clean. However, Biglari Holdings is 1.03 times less risky than Ultra Clean. It trades about 0.39 of its potential returns per unit of risk. Ultra Clean Holdings is currently generating about 0.08 per unit of risk. If you would invest 18,548 in Biglari Holdings on September 13, 2024 and sell it today you would earn a total of 4,531 from holding Biglari Holdings or generate 24.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. Ultra Clean Holdings
Performance |
| Timeline |
| Biglari Holdings |
| Ultra Clean Holdings |
Biglari Holdings and Ultra Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Ultra Clean
The main advantage of trading using opposite Biglari Holdings and Ultra Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings 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.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Ultra Clean vs. ON Semiconductor | Ultra Clean vs. Monolithic Power Systems | Ultra Clean vs. Globalfoundries | Ultra Clean vs. Wisekey International Holding |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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