Correlation Between Grocery Outlet and Ultra Clean
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet 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 Grocery Outlet and Ultra Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grocery Outlet Holding and Ultra Clean Holdings, you can compare the effects of market volatilities on Grocery Outlet 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 Grocery Outlet with a short position of Ultra Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Ultra Clean.
Diversification Opportunities for Grocery Outlet and Ultra Clean
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grocery and Ultra is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding 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 Grocery Outlet 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 Grocery Outlet Holding 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 Grocery Outlet i.e., Grocery Outlet and Ultra Clean go up and down completely randomly.
Pair Corralation between Grocery Outlet and Ultra Clean
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the Ultra Clean. But the stock apears to be less risky and, when comparing its historical volatility, Grocery Outlet Holding is 1.03 times less risky than Ultra Clean. The stock trades about -0.03 of its potential returns per unit of risk. The Ultra Clean Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,859 in Ultra Clean Holdings on August 29, 2024 and sell it today you would earn a total of 890.00 from holding Ultra Clean Holdings or generate 31.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. Ultra Clean Holdings
Performance |
| Timeline |
| Grocery Outlet Holding |
| Ultra Clean Holdings |
Grocery Outlet and Ultra Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Ultra Clean
The main advantage of trading using opposite Grocery Outlet and Ultra Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet 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.| Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Sendas Distribuidora SA | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Sprouts Farmers Market |
| Ultra Clean vs. Power Integrations | Ultra Clean vs. Diodes Incorporated | Ultra Clean vs. MACOM Technology Solutions | Ultra Clean vs. Cirrus Logic |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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