Correlation Between China Datang and Ultra Clean
Can any of the company-specific risk be diversified away by investing in both China Datang 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 China Datang and Ultra Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Datang and Ultra Clean Holdings, you can compare the effects of market volatilities on China Datang 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 China Datang with a short position of Ultra Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Datang and Ultra Clean.
Diversification Opportunities for China Datang and Ultra Clean
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Ultra is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding China Datang 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 China Datang 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 China Datang 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 China Datang i.e., China Datang and Ultra Clean go up and down completely randomly.
Pair Corralation between China Datang and Ultra Clean
Assuming the 90 days horizon China Datang is expected to generate 0.9 times more return on investment than Ultra Clean. However, China Datang is 1.11 times less risky than Ultra Clean. It trades about 0.11 of its potential returns per unit of risk. Ultra Clean Holdings is currently generating about 0.01 per unit of risk. If you would invest 23.00 in China Datang on October 30, 2024 and sell it today you would earn a total of 2.00 from holding China Datang or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Datang vs. Ultra Clean Holdings
Performance |
| Timeline |
| China Datang |
| Ultra Clean Holdings |
China Datang and Ultra Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Datang and Ultra Clean
The main advantage of trading using opposite China Datang and Ultra Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Datang 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.| China Datang vs. Broadridge Financial Solutions | China Datang vs. COPLAND ROAD CAPITAL | China Datang vs. CanSino Biologics | China Datang vs. SAN MIGUEL BREWERY |
| Ultra Clean vs. ASML Holding NV | Ultra Clean vs. Applied Materials | Ultra Clean vs. KLA Corporation | Ultra Clean vs. Teradyne |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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