Correlation Between ULTRA CLEAN and NESTE OYJ
Can any of the company-specific risk be diversified away by investing in both ULTRA CLEAN and NESTE OYJ 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 NESTE OYJ 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 NESTE OYJ UNSPADR, you can compare the effects of market volatilities on ULTRA CLEAN and NESTE OYJ 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 NESTE OYJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of ULTRA CLEAN and NESTE OYJ.
Diversification Opportunities for ULTRA CLEAN and NESTE OYJ
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between ULTRA and NESTE is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding ULTRA CLEAN HLDGS and NESTE OYJ UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESTE OYJ UNSPADR 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 NESTE OYJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESTE OYJ UNSPADR has no effect on the direction of ULTRA CLEAN i.e., ULTRA CLEAN and NESTE OYJ go up and down completely randomly.
Pair Corralation between ULTRA CLEAN and NESTE OYJ
Assuming the 90 days trading horizon ULTRA CLEAN HLDGS is expected to generate 1.07 times more return on investment than NESTE OYJ. However, ULTRA CLEAN is 1.07 times more volatile than NESTE OYJ UNSPADR. It trades about 0.03 of its potential returns per unit of risk. NESTE OYJ UNSPADR is currently generating about -0.08 per unit of risk. If you would invest 3,105 in ULTRA CLEAN HLDGS on September 20, 2024 and sell it today you would earn a total of 575.00 from holding ULTRA CLEAN HLDGS or generate 18.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
ULTRA CLEAN HLDGS vs. NESTE OYJ UNSPADR
Performance |
| Timeline |
| ULTRA CLEAN HLDGS |
| NESTE OYJ UNSPADR |
ULTRA CLEAN and NESTE OYJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ULTRA CLEAN and NESTE OYJ
The main advantage of trading using opposite ULTRA CLEAN and NESTE OYJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ULTRA CLEAN position performs unexpectedly, NESTE OYJ 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 NESTE OYJ will offset losses from the drop in NESTE OYJ's long position.| ULTRA CLEAN vs. Astral Foods Limited | ULTRA CLEAN vs. Charoen Pokphand Foods | ULTRA CLEAN vs. AUSNUTRIA DAIRY | ULTRA CLEAN vs. AUSTEVOLL SEAFOOD |
| NESTE OYJ vs. UNITED RENTALS | NESTE OYJ vs. Japan Post Insurance | NESTE OYJ vs. United Rentals | NESTE OYJ vs. ULTRA CLEAN HLDGS |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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