Correlation Between Natural Health and ULTRA CLEAN
Can any of the company-specific risk be diversified away by investing in both Natural Health 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 Natural Health and ULTRA CLEAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trends and ULTRA CLEAN HLDGS, you can compare the effects of market volatilities on Natural Health 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 Natural Health with a short position of ULTRA CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and ULTRA CLEAN.
Diversification Opportunities for Natural Health and ULTRA CLEAN
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Natural and ULTRA is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trends 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 Natural Health 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 Natural Health Trends 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 Natural Health i.e., Natural Health and ULTRA CLEAN go up and down completely randomly.
Pair Corralation between Natural Health and ULTRA CLEAN
Assuming the 90 days trading horizon Natural Health Trends is expected to under-perform the ULTRA CLEAN. But the stock apears to be less risky and, when comparing its historical volatility, Natural Health Trends is 1.09 times less risky than ULTRA CLEAN. The stock trades about -0.46 of its potential returns per unit of risk. The ULTRA CLEAN HLDGS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,440 in ULTRA CLEAN HLDGS on September 12, 2024 and sell it today you would earn a total of 100.00 from holding ULTRA CLEAN HLDGS or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trends vs. ULTRA CLEAN HLDGS
Performance |
| Timeline |
| Natural Health Trends |
| ULTRA CLEAN HLDGS |
Natural Health and ULTRA CLEAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and ULTRA CLEAN
The main advantage of trading using opposite Natural Health and ULTRA CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health 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.| Natural Health vs. Lendlease Group | Natural Health vs. FUYO GENERAL LEASE | Natural Health vs. Ares Management Corp | Natural Health vs. INVITATION HOMES DL |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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