Correlation Between Ultra Clean and Cars
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and Cars 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 Cars 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 Cars Inc, you can compare the effects of market volatilities on Ultra Clean and Cars 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 Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and Cars.
Diversification Opportunities for Ultra Clean and Cars
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ultra and Cars is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc 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 Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of Ultra Clean i.e., Ultra Clean and Cars go up and down completely randomly.
Pair Corralation between Ultra Clean and Cars
Assuming the 90 days horizon Ultra Clean is expected to generate 2.93 times less return on investment than Cars. But when comparing it to its historical volatility, Ultra Clean Holdings is 1.17 times less risky than Cars. It trades about 0.14 of its potential returns per unit of risk. Cars Inc is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,460 in Cars Inc on August 31, 2024 and sell it today you would earn a total of 390.00 from holding Cars Inc or generate 26.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Clean Holdings vs. Cars Inc
Performance |
| Timeline |
| Ultra Clean Holdings |
| Cars Inc |
Ultra Clean and Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and Cars
The main advantage of trading using opposite Ultra Clean and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, Cars 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 Cars will offset losses from the drop in Cars' long position.| Ultra Clean vs. SAFETY MEDICAL PROD | Ultra Clean vs. PLAYTECH | Ultra Clean vs. ONWARD MEDICAL BV | Ultra Clean vs. Playa Hotels Resorts |
| Cars vs. SALESFORCE INC CDR | Cars vs. FAST RETAIL ADR | Cars vs. Auto Trader Group | Cars vs. SHIP HEALTHCARE HLDGINC |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |