Correlation Between Ultra Clean and SBI Insurance
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and SBI Insurance 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 SBI Insurance 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 SBI Insurance Group, you can compare the effects of market volatilities on Ultra Clean and SBI Insurance 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 SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and SBI Insurance.
Diversification Opportunities for Ultra Clean and SBI Insurance
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ultra and SBI is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group 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 SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of Ultra Clean i.e., Ultra Clean and SBI Insurance go up and down completely randomly.
Pair Corralation between Ultra Clean and SBI Insurance
Assuming the 90 days horizon Ultra Clean is expected to generate 2.92 times less return on investment than SBI Insurance. In addition to that, Ultra Clean is 1.85 times more volatile than SBI Insurance Group. It trades about 0.07 of its total potential returns per unit of risk. SBI Insurance Group is currently generating about 0.4 per unit of volatility. If you would invest 555.00 in SBI Insurance Group on September 12, 2024 and sell it today you would earn a total of 70.00 from holding SBI Insurance Group or generate 12.61% 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. SBI Insurance Group
Performance |
| Timeline |
| Ultra Clean Holdings |
| SBI Insurance Group |
Ultra Clean and SBI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and SBI Insurance
The main advantage of trading using opposite Ultra Clean and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, SBI Insurance 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 SBI Insurance will offset losses from the drop in SBI Insurance's long position.| Ultra Clean vs. Applied Materials | Ultra Clean vs. Tokyo Electron Limited | Ultra Clean vs. Superior Plus Corp | Ultra Clean vs. SIVERS SEMICONDUCTORS AB |
| SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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