Correlation Between Ultra Clean and 2G ENERGY
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and 2G 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 2G ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultra Clean Holdings and 2G ENERGY , you can compare the effects of market volatilities on Ultra Clean and 2G 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 2G ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and 2G ENERGY.
Diversification Opportunities for Ultra Clean and 2G ENERGY
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ultra and 2GB is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and 2G ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2G ENERGY 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 Holdings are associated (or correlated) with 2G ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2G ENERGY has no effect on the direction of Ultra Clean i.e., Ultra Clean and 2G ENERGY go up and down completely randomly.
Pair Corralation between Ultra Clean and 2G ENERGY
Assuming the 90 days horizon Ultra Clean Holdings is expected to generate 0.95 times more return on investment than 2G ENERGY. However, Ultra Clean Holdings is 1.06 times less risky than 2G ENERGY. It trades about 0.19 of its potential returns per unit of risk. 2G ENERGY is currently generating about 0.01 per unit of risk. If you would invest 3,160 in Ultra Clean Holdings on September 1, 2024 and sell it today you would earn a total of 340.00 from holding Ultra Clean Holdings or generate 10.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ultra Clean Holdings vs. 2G ENERGY
Performance |
| Timeline |
| Ultra Clean Holdings |
| 2G ENERGY |
Ultra Clean and 2G ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and 2G ENERGY
The main advantage of trading using opposite Ultra Clean and 2G ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, 2G 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 2G ENERGY will offset losses from the drop in 2G ENERGY's long position.| Ultra Clean vs. Marie Brizard Wine | Ultra Clean vs. BJs Restaurants | Ultra Clean vs. VIRGIN WINES UK | Ultra Clean vs. PennantPark Investment |
| 2G ENERGY vs. Australian Agricultural | 2G ENERGY vs. Ultra Clean Holdings | 2G ENERGY vs. Charter Communications | 2G ENERGY vs. Consolidated Communications Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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