Correlation Between Ultra Clean and AVITA Medical
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and AVITA Medical 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 AVITA Medical 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 AVITA Medical, you can compare the effects of market volatilities on Ultra Clean and AVITA Medical 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 AVITA Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and AVITA Medical.
Diversification Opportunities for Ultra Clean and AVITA Medical
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ultra and AVITA is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and AVITA Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVITA Medical 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 AVITA Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVITA Medical has no effect on the direction of Ultra Clean i.e., Ultra Clean and AVITA Medical go up and down completely randomly.
Pair Corralation between Ultra Clean and AVITA Medical
Assuming the 90 days horizon Ultra Clean Holdings is expected to under-perform the AVITA Medical. In addition to that, Ultra Clean is 1.14 times more volatile than AVITA Medical. It trades about -0.1 of its total potential returns per unit of risk. AVITA Medical is currently generating about 0.19 per unit of volatility. If you would invest 161.00 in AVITA Medical on September 3, 2024 and sell it today you would earn a total of 79.00 from holding AVITA Medical or generate 49.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Clean Holdings vs. AVITA Medical
Performance |
| Timeline |
| Ultra Clean Holdings |
| AVITA Medical |
Ultra Clean and AVITA Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and AVITA Medical
The main advantage of trading using opposite Ultra Clean and AVITA Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, AVITA Medical 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 AVITA Medical will offset losses from the drop in AVITA Medical's long position.| Ultra Clean vs. ASML HOLDING NY | Ultra Clean vs. ASML Holding NV | Ultra Clean vs. ASML Holding NV | Ultra Clean vs. Applied Materials |
| AVITA Medical vs. Tradeweb Markets | AVITA Medical vs. Mitsui Chemicals | AVITA Medical vs. The Trade Desk | AVITA Medical vs. USWE SPORTS AB |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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