Correlation Between ULTRA CLEAN and Aristocrat Leisure
Can any of the company-specific risk be diversified away by investing in both ULTRA CLEAN and Aristocrat Leisure 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 Aristocrat Leisure 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 Aristocrat Leisure Limited, you can compare the effects of market volatilities on ULTRA CLEAN and Aristocrat Leisure 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 Aristocrat Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of ULTRA CLEAN and Aristocrat Leisure.
Diversification Opportunities for ULTRA CLEAN and Aristocrat Leisure
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between ULTRA and Aristocrat is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding ULTRA CLEAN HLDGS and Aristocrat Leisure Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristocrat Leisure 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 Aristocrat Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristocrat Leisure has no effect on the direction of ULTRA CLEAN i.e., ULTRA CLEAN and Aristocrat Leisure go up and down completely randomly.
Pair Corralation between ULTRA CLEAN and Aristocrat Leisure
Assuming the 90 days trading horizon ULTRA CLEAN HLDGS is expected to under-perform the Aristocrat Leisure. In addition to that, ULTRA CLEAN is 2.29 times more volatile than Aristocrat Leisure Limited. It trades about -0.05 of its total potential returns per unit of risk. Aristocrat Leisure Limited is currently generating about 0.15 per unit of volatility. If you would invest 3,207 in Aristocrat Leisure Limited on December 4, 2024 and sell it today you would earn a total of 1,073 from holding Aristocrat Leisure Limited or generate 33.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ULTRA CLEAN HLDGS vs. Aristocrat Leisure Limited
Performance |
| Timeline |
| ULTRA CLEAN HLDGS |
| Aristocrat Leisure |
ULTRA CLEAN and Aristocrat Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ULTRA CLEAN and Aristocrat Leisure
The main advantage of trading using opposite ULTRA CLEAN and Aristocrat Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ULTRA CLEAN position performs unexpectedly, Aristocrat Leisure 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 Aristocrat Leisure will offset losses from the drop in Aristocrat Leisure's long position.| ULTRA CLEAN vs. Calibre Mining Corp | ULTRA CLEAN vs. Easy Software AG | ULTRA CLEAN vs. FIREWEED METALS P | ULTRA CLEAN vs. Sunny Optical Technology |
| Aristocrat Leisure vs. GOLD ROAD RES | Aristocrat Leisure vs. EVS Broadcast Equipment | Aristocrat Leisure vs. SAFEROADS HLDGS | Aristocrat Leisure vs. Air Transport Services |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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