Correlation Between ULTRA CLEAN and United Insurance
Can any of the company-specific risk be diversified away by investing in both ULTRA CLEAN and United Insurance 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 ULTRA CLEAN and United Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ULTRA CLEAN HLDGS and United Insurance Holdings, you can compare the effects of market volatilities on ULTRA CLEAN and United Insurance 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 ULTRA CLEAN with a short position of United Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of ULTRA CLEAN and United Insurance.
Diversification Opportunities for ULTRA CLEAN and United Insurance
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ULTRA and United is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ULTRA CLEAN HLDGS and United Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Insurance Holdings and ULTRA CLEAN 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 ULTRA CLEAN HLDGS are associated (or correlated) with United Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Insurance Holdings has no effect on the direction of ULTRA CLEAN i.e., ULTRA CLEAN and United Insurance go up and down completely randomly.
Pair Corralation between ULTRA CLEAN and United Insurance
Assuming the 90 days trading horizon ULTRA CLEAN HLDGS is expected to generate 0.79 times more return on investment than United Insurance. However, ULTRA CLEAN HLDGS is 1.26 times less risky than United Insurance. It trades about 0.16 of its potential returns per unit of risk. United Insurance Holdings is currently generating about -0.11 per unit of risk. If you would invest 3,520 in ULTRA CLEAN HLDGS on October 11, 2024 and sell it today you would earn a total of 220.00 from holding ULTRA CLEAN HLDGS or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ULTRA CLEAN HLDGS vs. United Insurance Holdings
Performance |
| Timeline |
| ULTRA CLEAN HLDGS |
| United Insurance Holdings |
ULTRA CLEAN and United Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ULTRA CLEAN and United Insurance
The main advantage of trading using opposite ULTRA CLEAN and United Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ULTRA CLEAN position performs unexpectedly, United Insurance 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 United Insurance will offset losses from the drop in United Insurance's long position.| ULTRA CLEAN vs. FARM 51 GROUP | ULTRA CLEAN vs. Zijin Mining Group | ULTRA CLEAN vs. Stag Industrial | ULTRA CLEAN vs. GREENX METALS LTD |
| United Insurance vs. Austevoll Seafood ASA | United Insurance vs. RCI Hospitality Holdings | United Insurance vs. Wenzhou Kangning Hospital | United Insurance vs. COFCO Joycome Foods |
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 Stocks Directory module to find actively traded stocks across global markets.
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