Correlation Between SBI Insurance and Ultra Clean
Can any of the company-specific risk be diversified away by investing in both SBI Insurance 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 SBI Insurance and Ultra Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Insurance Group and Ultra Clean Holdings, you can compare the effects of market volatilities on SBI Insurance 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 SBI Insurance with a short position of Ultra Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Insurance and Ultra Clean.
Diversification Opportunities for SBI Insurance and Ultra Clean
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBI and Ultra is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group 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 SBI Insurance 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 SBI Insurance Group 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 SBI Insurance i.e., SBI Insurance and Ultra Clean go up and down completely randomly.
Pair Corralation between SBI Insurance and Ultra Clean
Assuming the 90 days trading horizon SBI Insurance Group is expected to generate 0.54 times more return on investment than Ultra Clean. However, SBI Insurance Group is 1.85 times less risky than Ultra Clean. It trades about 0.4 of its potential returns per unit of risk. Ultra Clean Holdings is currently generating about 0.07 per unit of risk. If you would invest 555.00 in SBI Insurance Group on September 12, 2024 and sell it today you would earn a total of 70.00 from holding SBI Insurance Group or generate 12.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Insurance Group vs. Ultra Clean Holdings
Performance |
| Timeline |
| SBI Insurance Group |
| Ultra Clean Holdings |
SBI Insurance and Ultra Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Insurance and Ultra Clean
The main advantage of trading using opposite SBI Insurance and Ultra Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Insurance 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.| SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc |
| Ultra Clean vs. Applied Materials | Ultra Clean vs. Tokyo Electron Limited | Ultra Clean vs. Superior Plus Corp | Ultra Clean vs. SIVERS SEMICONDUCTORS AB |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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