Correlation Between Ultra Clean and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and Harmony Gold 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 Harmony Gold 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 Harmony Gold Mining, you can compare the effects of market volatilities on Ultra Clean and Harmony Gold 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 Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and Harmony Gold.
Diversification Opportunities for Ultra Clean and Harmony Gold
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ultra and Harmony is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining 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 Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Ultra Clean i.e., Ultra Clean and Harmony Gold go up and down completely randomly.
Pair Corralation between Ultra Clean and Harmony Gold
Assuming the 90 days horizon Ultra Clean Holdings is expected to generate 0.79 times more return on investment than Harmony Gold. However, Ultra Clean Holdings is 1.26 times less risky than Harmony Gold. It trades about 0.23 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.13 per unit of risk. If you would invest 3,100 in Ultra Clean Holdings on September 3, 2024 and sell it today you would earn a total of 400.00 from holding Ultra Clean Holdings or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Clean Holdings vs. Harmony Gold Mining
Performance |
| Timeline |
| Ultra Clean Holdings |
| Harmony Gold Mining |
Ultra Clean and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and Harmony Gold
The main advantage of trading using opposite Ultra Clean and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, Harmony Gold 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 Harmony Gold will offset losses from the drop in Harmony Gold's long position.| Ultra Clean vs. ASML HOLDING NY | Ultra Clean vs. ASML Holding NV | Ultra Clean vs. ASML Holding NV | Ultra Clean vs. Lam Research |
| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Barrick Gold | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings |
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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