Correlation Between LION ONE and ULTRA CLEAN
Can any of the company-specific risk be diversified away by investing in both LION ONE 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 LION ONE and ULTRA CLEAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LION ONE METALS and ULTRA CLEAN HLDGS, you can compare the effects of market volatilities on LION ONE 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 LION ONE with a short position of ULTRA CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and ULTRA CLEAN.
Diversification Opportunities for LION ONE and ULTRA CLEAN
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LION and ULTRA is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS 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 LION ONE 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 LION ONE METALS 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 LION ONE i.e., LION ONE and ULTRA CLEAN go up and down completely randomly.
Pair Corralation between LION ONE and ULTRA CLEAN
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the ULTRA CLEAN. In addition to that, LION ONE is 1.42 times more volatile than ULTRA CLEAN HLDGS. It trades about -0.03 of its total potential returns per unit of risk. ULTRA CLEAN HLDGS is currently generating about 0.02 per unit of volatility. If you would invest 3,534 in ULTRA CLEAN HLDGS on September 3, 2024 and sell it today you would earn a total of 86.00 from holding ULTRA CLEAN HLDGS or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. ULTRA CLEAN HLDGS
Performance |
| Timeline |
| LION ONE METALS |
| ULTRA CLEAN HLDGS |
LION ONE and ULTRA CLEAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and ULTRA CLEAN
The main advantage of trading using opposite LION ONE and ULTRA CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE 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.| LION ONE vs. HomeToGo SE | LION ONE vs. NORTHEAST UTILITIES | LION ONE vs. SBM OFFSHORE | LION ONE vs. Zijin Mining Group |
| ULTRA CLEAN vs. TOTAL GABON | ULTRA CLEAN vs. Walgreens Boots Alliance | ULTRA CLEAN vs. Peak Resources Limited |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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