Correlation Between ELMOS SEMICONDUCTOR and Ultra Clean
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR and Ultra Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and Ultra Clean Holdings, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR with a short position of Ultra Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and Ultra Clean.
Diversification Opportunities for ELMOS SEMICONDUCTOR and Ultra Clean
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ELMOS and Ultra is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and Ultra Clean go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and Ultra Clean
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 2.55 times less return on investment than Ultra Clean. But when comparing it to its historical volatility, ELMOS SEMICONDUCTOR is 1.03 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 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,240 in Ultra Clean Holdings on August 25, 2024 and sell it today you would earn a total of 140.00 from holding Ultra Clean Holdings or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELMOS SEMICONDUCTOR vs. Ultra Clean Holdings
Performance |
| Timeline |
| ELMOS SEMICONDUCTOR |
| Ultra Clean Holdings |
ELMOS SEMICONDUCTOR and Ultra Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELMOS SEMICONDUCTOR and Ultra Clean
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and Ultra Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR 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.| ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc |
| Ultra Clean vs. ASML HOLDING NY | Ultra Clean vs. Applied Materials | Ultra Clean vs. Lam Research | Ultra Clean vs. Superior Plus Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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