Correlation Between Ultra Clean and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE, you can compare the effects of market volatilities on Ultra Clean and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and GEELY AUTOMOBILE.
Diversification Opportunities for Ultra Clean and GEELY AUTOMOBILE
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ultra and GEELY is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of Ultra Clean i.e., Ultra Clean and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between Ultra Clean and GEELY AUTOMOBILE
Assuming the 90 days horizon Ultra Clean Holdings is expected to generate 1.22 times more return on investment than GEELY AUTOMOBILE. However, Ultra Clean is 1.22 times more volatile than GEELY AUTOMOBILE. It trades about 0.02 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about -0.08 per unit of risk. If you would invest 3,460 in Ultra Clean Holdings on October 30, 2024 and sell it today you would earn a total of 20.00 from holding Ultra Clean Holdings or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Clean Holdings vs. GEELY AUTOMOBILE
Performance |
| Timeline |
| Ultra Clean Holdings |
| GEELY AUTOMOBILE |
Ultra Clean and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and GEELY AUTOMOBILE
The main advantage of trading using opposite Ultra Clean and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, GEELY AUTOMOBILE 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 GEELY AUTOMOBILE will offset losses from the drop in GEELY AUTOMOBILE's long position.| Ultra Clean vs. ASML Holding NV | Ultra Clean vs. Applied Materials | Ultra Clean vs. KLA Corporation | Ultra Clean vs. Teradyne |
| GEELY AUTOMOBILE vs. Goosehead Insurance | GEELY AUTOMOBILE vs. ANTA SPORTS PRODUCT | GEELY AUTOMOBILE vs. Dave Busters Entertainment | GEELY AUTOMOBILE vs. Zurich Insurance Group |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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