Correlation Between Ultra Clean and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and Benchmark Electronics 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 Benchmark Electronics 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 Benchmark Electronics, you can compare the effects of market volatilities on Ultra Clean and Benchmark Electronics 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 Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and Benchmark Electronics.
Diversification Opportunities for Ultra Clean and Benchmark Electronics
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ultra and Benchmark is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics 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 Benchmark Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Electronics has no effect on the direction of Ultra Clean i.e., Ultra Clean and Benchmark Electronics go up and down completely randomly.
Pair Corralation between Ultra Clean and Benchmark Electronics
Assuming the 90 days horizon Ultra Clean Holdings is expected to under-perform the Benchmark Electronics. In addition to that, Ultra Clean is 1.27 times more volatile than Benchmark Electronics. It trades about -0.02 of its total potential returns per unit of risk. Benchmark Electronics is currently generating about 0.05 per unit of volatility. If you would invest 3,906 in Benchmark Electronics on September 1, 2024 and sell it today you would earn a total of 614.00 from holding Benchmark Electronics or generate 15.72% 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. Benchmark Electronics
Performance |
| Timeline |
| Ultra Clean Holdings |
| Benchmark Electronics |
Ultra Clean and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and Benchmark Electronics
The main advantage of trading using opposite Ultra Clean and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, Benchmark Electronics 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 Benchmark Electronics will offset losses from the drop in Benchmark Electronics' long position.| Ultra Clean vs. Marie Brizard Wine | Ultra Clean vs. BJs Restaurants | Ultra Clean vs. VIRGIN WINES UK | Ultra Clean vs. PennantPark Investment |
| Benchmark Electronics vs. METHODE ELECTRONICS | Benchmark Electronics vs. Soken Chemical Engineering | Benchmark Electronics vs. KIMBALL ELECTRONICS | Benchmark Electronics vs. Quaker Chemical |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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