Correlation Between ULTRA CLEAN and Air Lease
Can any of the company-specific risk be diversified away by investing in both ULTRA CLEAN and Air Lease 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 Air Lease 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 Air Lease, you can compare the effects of market volatilities on ULTRA CLEAN and Air Lease 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 Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of ULTRA CLEAN and Air Lease.
Diversification Opportunities for ULTRA CLEAN and Air Lease
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ULTRA and Air is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ULTRA CLEAN HLDGS and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease 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 Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of ULTRA CLEAN i.e., ULTRA CLEAN and Air Lease go up and down completely randomly.
Pair Corralation between ULTRA CLEAN and Air Lease
Assuming the 90 days trading horizon ULTRA CLEAN HLDGS is expected to generate 2.14 times more return on investment than Air Lease. However, ULTRA CLEAN is 2.14 times more volatile than Air Lease. It trades about 0.01 of its potential returns per unit of risk. Air Lease is currently generating about -0.13 per unit of risk. If you would invest 3,560 in ULTRA CLEAN HLDGS on November 3, 2024 and sell it today you would lose (20.00) from holding ULTRA CLEAN HLDGS or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ULTRA CLEAN HLDGS vs. Air Lease
Performance |
| Timeline |
| ULTRA CLEAN HLDGS |
| Air Lease |
ULTRA CLEAN and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ULTRA CLEAN and Air Lease
The main advantage of trading using opposite ULTRA CLEAN and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ULTRA CLEAN position performs unexpectedly, Air Lease 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 Air Lease will offset losses from the drop in Air Lease's long position.| ULTRA CLEAN vs. PKSHA TECHNOLOGY INC | ULTRA CLEAN vs. Yanzhou Coal Mining | ULTRA CLEAN vs. Globex Mining Enterprises | ULTRA CLEAN vs. BioNTech SE |
| Air Lease vs. Acadia Healthcare | Air Lease vs. EPSILON HEALTHCARE LTD | Air Lease vs. Universal Health Realty | Air Lease vs. Ares Management Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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