Correlation Between Ultra Clean and ASML HOLDING
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and ASML HOLDING 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 ASML HOLDING 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 ASML HOLDING NY, you can compare the effects of market volatilities on Ultra Clean and ASML HOLDING 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 ASML HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and ASML HOLDING.
Diversification Opportunities for Ultra Clean and ASML HOLDING
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ultra and ASML is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and ASML HOLDING NY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML HOLDING NY 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 ASML HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML HOLDING NY has no effect on the direction of Ultra Clean i.e., Ultra Clean and ASML HOLDING go up and down completely randomly.
Pair Corralation between Ultra Clean and ASML HOLDING
Assuming the 90 days horizon Ultra Clean Holdings is expected to generate 2.74 times more return on investment than ASML HOLDING. However, Ultra Clean is 2.74 times more volatile than ASML HOLDING NY. It trades about 0.06 of its potential returns per unit of risk. ASML HOLDING NY is currently generating about -0.11 per unit of risk. If you would invest 3,240 in Ultra Clean Holdings on August 25, 2024 and sell it today you would earn a total of 140.00 from holding Ultra Clean Holdings or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Clean Holdings vs. ASML HOLDING NY
Performance |
| Timeline |
| Ultra Clean Holdings |
| ASML HOLDING NY |
Ultra Clean and ASML HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and ASML HOLDING
The main advantage of trading using opposite Ultra Clean and ASML HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, ASML HOLDING 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 ASML HOLDING will offset losses from the drop in ASML HOLDING's long position.| Ultra Clean vs. ASML HOLDING NY | Ultra Clean vs. Applied Materials | Ultra Clean vs. Lam Research | Ultra Clean vs. Superior Plus Corp |
| ASML HOLDING vs. TEXAS ROADHOUSE | ASML HOLDING vs. EVS Broadcast Equipment | ASML HOLDING vs. Broadcom | ASML HOLDING vs. Avanos Medical |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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