Correlation Between Ultra Clean and INSURANCE AUST
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and INSURANCE AUST 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 INSURANCE AUST 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 INSURANCE AUST GRP, you can compare the effects of market volatilities on Ultra Clean and INSURANCE AUST 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 INSURANCE AUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and INSURANCE AUST.
Diversification Opportunities for Ultra Clean and INSURANCE AUST
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ultra and INSURANCE is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and INSURANCE AUST GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSURANCE AUST GRP 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 INSURANCE AUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSURANCE AUST GRP has no effect on the direction of Ultra Clean i.e., Ultra Clean and INSURANCE AUST go up and down completely randomly.
Pair Corralation between Ultra Clean and INSURANCE AUST
Assuming the 90 days horizon Ultra Clean is expected to generate 2.62 times less return on investment than INSURANCE AUST. In addition to that, Ultra Clean is 2.04 times more volatile than INSURANCE AUST GRP. It trades about 0.02 of its total potential returns per unit of risk. INSURANCE AUST GRP is currently generating about 0.11 per unit of volatility. If you would invest 286.00 in INSURANCE AUST GRP on September 4, 2024 and sell it today you would earn a total of 229.00 from holding INSURANCE AUST GRP or generate 80.07% 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. INSURANCE AUST GRP
Performance |
| Timeline |
| Ultra Clean Holdings |
| INSURANCE AUST GRP |
Ultra Clean and INSURANCE AUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and INSURANCE AUST
The main advantage of trading using opposite Ultra Clean and INSURANCE AUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, INSURANCE AUST 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 INSURANCE AUST will offset losses from the drop in INSURANCE AUST'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 |
| INSURANCE AUST vs. Strategic Investments AS | INSURANCE AUST vs. American Eagle Outfitters | INSURANCE AUST vs. Virtus Investment Partners | INSURANCE AUST vs. Aegean Airlines SA |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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