Correlation Between ULTRA CLEAN and Allianz SE

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Can any of the company-specific risk be diversified away by investing in both ULTRA CLEAN and Allianz SE 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 Allianz SE 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 Allianz SE, you can compare the effects of market volatilities on ULTRA CLEAN and Allianz SE 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 Allianz SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ULTRA CLEAN and Allianz SE.

Diversification Opportunities for ULTRA CLEAN and Allianz SE

0.37
  Correlation Coefficient

Weak diversification

The 3 months correlation between ULTRA and Allianz is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding ULTRA CLEAN HLDGS and Allianz SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE 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 Allianz SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianz SE has no effect on the direction of ULTRA CLEAN i.e., ULTRA CLEAN and Allianz SE go up and down completely randomly.

Pair Corralation between ULTRA CLEAN and Allianz SE

Assuming the 90 days trading horizon ULTRA CLEAN is expected to generate 2.17 times less return on investment than Allianz SE. In addition to that, ULTRA CLEAN is 2.95 times more volatile than Allianz SE. It trades about 0.02 of its total potential returns per unit of risk. Allianz SE is currently generating about 0.1 per unit of volatility. If you would invest  18,325  in Allianz SE on August 29, 2024 and sell it today you would earn a total of  10,775  from holding Allianz SE or generate 58.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

ULTRA CLEAN HLDGS  vs.  Allianz SE

 Performance 
       Timeline  
ULTRA CLEAN HLDGS 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in ULTRA CLEAN HLDGS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, ULTRA CLEAN may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Allianz SE 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Allianz SE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Allianz SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ULTRA CLEAN and Allianz SE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ULTRA CLEAN and Allianz SE

The main advantage of trading using opposite ULTRA CLEAN and Allianz SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ULTRA CLEAN position performs unexpectedly, Allianz SE 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 Allianz SE will offset losses from the drop in Allianz SE's long position.
The idea behind ULTRA CLEAN HLDGS and Allianz SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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