Correlation Between Ultra Clean and Science Applications
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and Science Applications 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 Science Applications 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 Science Applications International, you can compare the effects of market volatilities on Ultra Clean and Science Applications 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 Science Applications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and Science Applications.
Diversification Opportunities for Ultra Clean and Science Applications
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ultra and Science is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Science Applications Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science Applications 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 Science Applications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science Applications has no effect on the direction of Ultra Clean i.e., Ultra Clean and Science Applications go up and down completely randomly.
Pair Corralation between Ultra Clean and Science Applications
Assuming the 90 days horizon Ultra Clean Holdings is expected to generate 1.7 times more return on investment than Science Applications. However, Ultra Clean is 1.7 times more volatile than Science Applications International. It trades about 0.04 of its potential returns per unit of risk. Science Applications International is currently generating about 0.05 per unit of risk. If you would invest 2,500 in Ultra Clean Holdings on August 31, 2024 and sell it today you would earn a total of 1,000.00 from holding Ultra Clean Holdings or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Clean Holdings vs. Science Applications Internati
Performance |
| Timeline |
| Ultra Clean Holdings |
| Science Applications |
Ultra Clean and Science Applications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and Science Applications
The main advantage of trading using opposite Ultra Clean and Science Applications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, Science Applications 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 Science Applications will offset losses from the drop in Science Applications' long position.| Ultra Clean vs. SAFETY MEDICAL PROD | Ultra Clean vs. PLAYTECH | Ultra Clean vs. ONWARD MEDICAL BV | Ultra Clean vs. Playa Hotels Resorts |
| Science Applications vs. Brockhaus Capital Management | Science Applications vs. STMICROELECTRONICS | Science Applications vs. Jupiter Fund Management | Science Applications vs. CEOTRONICS |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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