Correlation Between ULTRA CLEAN and Delta Electronics
Can any of the company-specific risk be diversified away by investing in both ULTRA CLEAN and Delta Electronics 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 Delta Electronics 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 Delta Electronics Public, you can compare the effects of market volatilities on ULTRA CLEAN and Delta Electronics 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 Delta Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ULTRA CLEAN and Delta Electronics.
Diversification Opportunities for ULTRA CLEAN and Delta Electronics
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ULTRA and Delta is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ULTRA CLEAN HLDGS and Delta Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Electronics Public 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 Delta Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Electronics Public has no effect on the direction of ULTRA CLEAN i.e., ULTRA CLEAN and Delta Electronics go up and down completely randomly.
Pair Corralation between ULTRA CLEAN and Delta Electronics
Assuming the 90 days trading horizon ULTRA CLEAN is expected to generate 3.56 times less return on investment than Delta Electronics. But when comparing it to its historical volatility, ULTRA CLEAN HLDGS is 1.47 times less risky than Delta Electronics. It trades about 0.03 of its potential returns per unit of risk. Delta Electronics Public is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 144.00 in Delta Electronics Public on October 11, 2024 and sell it today you would earn a total of 270.00 from holding Delta Electronics Public or generate 187.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ULTRA CLEAN HLDGS vs. Delta Electronics Public
Performance |
| Timeline |
| ULTRA CLEAN HLDGS |
| Delta Electronics Public |
ULTRA CLEAN and Delta Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ULTRA CLEAN and Delta Electronics
The main advantage of trading using opposite ULTRA CLEAN and Delta Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ULTRA CLEAN position performs unexpectedly, Delta Electronics 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 Delta Electronics will offset losses from the drop in Delta Electronics' long position.| ULTRA CLEAN vs. FARM 51 GROUP | ULTRA CLEAN vs. Zijin Mining Group | ULTRA CLEAN vs. Stag Industrial | ULTRA CLEAN vs. GREENX METALS LTD |
| Delta Electronics vs. GRENKELEASING Dusseldorf | Delta Electronics vs. Lendlease Group | Delta Electronics vs. Sixt Leasing SE | Delta Electronics vs. Air Lease |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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