Correlation Between Schibsted ASA and Ultra Clean
Can any of the company-specific risk be diversified away by investing in both Schibsted ASA 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 Schibsted ASA and Ultra Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schibsted ASA ADR and Ultra Clean Holdings, you can compare the effects of market volatilities on Schibsted ASA 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 Schibsted ASA with a short position of Ultra Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schibsted ASA and Ultra Clean.
Diversification Opportunities for Schibsted ASA and Ultra Clean
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Schibsted and Ultra is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Schibsted ASA ADR 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 Schibsted ASA 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 Schibsted ASA ADR 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 Schibsted ASA i.e., Schibsted ASA and Ultra Clean go up and down completely randomly.
Pair Corralation between Schibsted ASA and Ultra Clean
Assuming the 90 days horizon Schibsted ASA ADR is expected to generate 2.8 times more return on investment than Ultra Clean. However, Schibsted ASA is 2.8 times more volatile than Ultra Clean Holdings. It trades about 0.06 of its potential returns per unit of risk. Ultra Clean Holdings is currently generating about 0.02 per unit of risk. If you would invest 1,855 in Schibsted ASA ADR on September 5, 2024 and sell it today you would earn a total of 1,705 from holding Schibsted ASA ADR or generate 91.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 82.42% |
| Values | Daily Returns |
Schibsted ASA ADR vs. Ultra Clean Holdings
Performance |
| Timeline |
| Schibsted ASA ADR |
| Ultra Clean Holdings |
Schibsted ASA and Ultra Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schibsted ASA and Ultra Clean
The main advantage of trading using opposite Schibsted ASA and Ultra Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schibsted ASA 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.| Schibsted ASA vs. Ultra Clean Holdings | Schibsted ASA vs. Stagwell | Schibsted ASA vs. Weibo Corp | Schibsted ASA vs. Boston Omaha Corp |
| Ultra Clean vs. Amtech Systems | Ultra Clean vs. Veeco Instruments | Ultra Clean vs. Cohu Inc | Ultra Clean vs. Onto Innovation |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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