Correlation Between FIH MOBILE and ULTRA CLEAN
Can any of the company-specific risk be diversified away by investing in both FIH MOBILE 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 FIH MOBILE and ULTRA CLEAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIH MOBILE and ULTRA CLEAN HLDGS, you can compare the effects of market volatilities on FIH MOBILE 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 FIH MOBILE with a short position of ULTRA CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIH MOBILE and ULTRA CLEAN.
Diversification Opportunities for FIH MOBILE and ULTRA CLEAN
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FIH and ULTRA is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding FIH MOBILE 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 FIH MOBILE 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 FIH MOBILE 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 FIH MOBILE i.e., FIH MOBILE and ULTRA CLEAN go up and down completely randomly.
Pair Corralation between FIH MOBILE and ULTRA CLEAN
Assuming the 90 days trading horizon FIH MOBILE is expected to generate 1.22 times less return on investment than ULTRA CLEAN. But when comparing it to its historical volatility, FIH MOBILE is 1.96 times less risky than ULTRA CLEAN. It trades about 0.02 of its potential returns per unit of risk. ULTRA CLEAN HLDGS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,411 in ULTRA CLEAN HLDGS on October 28, 2024 and sell it today you would earn a total of 89.00 from holding ULTRA CLEAN HLDGS or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIH MOBILE vs. ULTRA CLEAN HLDGS
Performance |
| Timeline |
| FIH MOBILE |
| ULTRA CLEAN HLDGS |
FIH MOBILE and ULTRA CLEAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIH MOBILE and ULTRA CLEAN
The main advantage of trading using opposite FIH MOBILE and ULTRA CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIH MOBILE 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.The idea behind FIH MOBILE and ULTRA CLEAN HLDGS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ULTRA CLEAN vs. CN MODERN DAIRY | ULTRA CLEAN vs. TYSON FOODS A | ULTRA CLEAN vs. Nomad Foods | ULTRA CLEAN vs. CHINA EDUCATION GROUP |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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