Correlation Between ULTRA CLEAN and ENN Energy
Can any of the company-specific risk be diversified away by investing in both ULTRA CLEAN and ENN Energy 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 ENN Energy 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 ENN Energy Holdings, you can compare the effects of market volatilities on ULTRA CLEAN and ENN Energy 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 ENN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ULTRA CLEAN and ENN Energy.
Diversification Opportunities for ULTRA CLEAN and ENN Energy
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ULTRA and ENN is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding ULTRA CLEAN HLDGS and ENN Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENN Energy Holdings 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 ENN Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENN Energy Holdings has no effect on the direction of ULTRA CLEAN i.e., ULTRA CLEAN and ENN Energy go up and down completely randomly.
Pair Corralation between ULTRA CLEAN and ENN Energy
Assuming the 90 days trading horizon ULTRA CLEAN HLDGS is expected to generate 1.27 times more return on investment than ENN Energy. However, ULTRA CLEAN is 1.27 times more volatile than ENN Energy Holdings. It trades about 0.11 of its potential returns per unit of risk. ENN Energy Holdings is currently generating about -0.13 per unit of risk. If you would invest 3,620 in ULTRA CLEAN HLDGS on October 12, 2024 and sell it today you would earn a total of 140.00 from holding ULTRA CLEAN HLDGS or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ULTRA CLEAN HLDGS vs. ENN Energy Holdings
Performance |
| Timeline |
| ULTRA CLEAN HLDGS |
| ENN Energy Holdings |
ULTRA CLEAN and ENN Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ULTRA CLEAN and ENN Energy
The main advantage of trading using opposite ULTRA CLEAN and ENN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ULTRA CLEAN position performs unexpectedly, ENN Energy 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 ENN Energy will offset losses from the drop in ENN Energy's 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 |
| ENN Energy vs. ARISTOCRAT LEISURE | ENN Energy vs. ULTRA CLEAN HLDGS | ENN Energy vs. ALERION CLEANPOWER | ENN Energy vs. PLAYWAY SA ZY 10 |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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