Correlation Between IMPERIAL TOBACCO and Ultra Clean
Can any of the company-specific risk be diversified away by investing in both IMPERIAL TOBACCO 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 IMPERIAL TOBACCO and Ultra Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMPERIAL TOBACCO and Ultra Clean Holdings, you can compare the effects of market volatilities on IMPERIAL TOBACCO 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 IMPERIAL TOBACCO with a short position of Ultra Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMPERIAL TOBACCO and Ultra Clean.
Diversification Opportunities for IMPERIAL TOBACCO and Ultra Clean
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between IMPERIAL and Ultra is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding IMPERIAL TOBACCO 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 IMPERIAL TOBACCO 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 IMPERIAL TOBACCO 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 IMPERIAL TOBACCO i.e., IMPERIAL TOBACCO and Ultra Clean go up and down completely randomly.
Pair Corralation between IMPERIAL TOBACCO and Ultra Clean
Assuming the 90 days trading horizon IMPERIAL TOBACCO is expected to generate 0.34 times more return on investment than Ultra Clean. However, IMPERIAL TOBACCO is 2.95 times less risky than Ultra Clean. It trades about 0.14 of its potential returns per unit of risk. Ultra Clean Holdings is currently generating about 0.03 per unit of risk. If you would invest 2,096 in IMPERIAL TOBACCO on October 18, 2024 and sell it today you would earn a total of 935.00 from holding IMPERIAL TOBACCO or generate 44.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IMPERIAL TOBACCO vs. Ultra Clean Holdings
Performance |
| Timeline |
| IMPERIAL TOBACCO |
| Ultra Clean Holdings |
IMPERIAL TOBACCO and Ultra Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMPERIAL TOBACCO and Ultra Clean
The main advantage of trading using opposite IMPERIAL TOBACCO and Ultra Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMPERIAL TOBACCO 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.| IMPERIAL TOBACCO vs. VIENNA INSURANCE GR | IMPERIAL TOBACCO vs. COMBA TELECOM SYST | IMPERIAL TOBACCO vs. Zurich Insurance Group | IMPERIAL TOBACCO vs. Safety Insurance Group |
| Ultra Clean vs. NTT DATA | Ultra Clean vs. SILVER BULLET DATA | Ultra Clean vs. TT Electronics PLC | Ultra Clean vs. Nanjing Panda Electronics |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |