Correlation Between ULTRA CLEAN and ANGLO ASIAN
Can any of the company-specific risk be diversified away by investing in both ULTRA CLEAN and ANGLO ASIAN 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 ANGLO ASIAN 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 ANGLO ASIAN MINING, you can compare the effects of market volatilities on ULTRA CLEAN and ANGLO ASIAN 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 ANGLO ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of ULTRA CLEAN and ANGLO ASIAN.
Diversification Opportunities for ULTRA CLEAN and ANGLO ASIAN
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ULTRA and ANGLO is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding ULTRA CLEAN HLDGS and ANGLO ASIAN MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGLO ASIAN MINING 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 ANGLO ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGLO ASIAN MINING has no effect on the direction of ULTRA CLEAN i.e., ULTRA CLEAN and ANGLO ASIAN go up and down completely randomly.
Pair Corralation between ULTRA CLEAN and ANGLO ASIAN
Assuming the 90 days trading horizon ULTRA CLEAN is expected to generate 9.16 times less return on investment than ANGLO ASIAN. But when comparing it to its historical volatility, ULTRA CLEAN HLDGS is 1.23 times less risky than ANGLO ASIAN. It trades about 0.01 of its potential returns per unit of risk. ANGLO ASIAN MINING is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 125.00 in ANGLO ASIAN MINING on October 28, 2024 and sell it today you would earn a total of 4.00 from holding ANGLO ASIAN MINING or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ULTRA CLEAN HLDGS vs. ANGLO ASIAN MINING
Performance |
| Timeline |
| ULTRA CLEAN HLDGS |
| ANGLO ASIAN MINING |
ULTRA CLEAN and ANGLO ASIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ULTRA CLEAN and ANGLO ASIAN
The main advantage of trading using opposite ULTRA CLEAN and ANGLO ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ULTRA CLEAN position performs unexpectedly, ANGLO ASIAN 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 ANGLO ASIAN will offset losses from the drop in ANGLO ASIAN's long position.| ULTRA CLEAN vs. CN MODERN DAIRY | ULTRA CLEAN vs. TYSON FOODS A | ULTRA CLEAN vs. Nomad Foods | ULTRA CLEAN vs. CHINA EDUCATION GROUP |
| ANGLO ASIAN vs. GEAR4MUSIC LS 10 | ANGLO ASIAN vs. AOI Electronics Co | ANGLO ASIAN vs. Warner Music Group | ANGLO ASIAN vs. Renesas 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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