Correlation Between Ultra Clean and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and NTG Nordic 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 NTG Nordic 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 NTG Nordic Transport, you can compare the effects of market volatilities on Ultra Clean and NTG Nordic 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 NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and NTG Nordic.
Diversification Opportunities for Ultra Clean and NTG Nordic
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ultra and NTG is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of Ultra Clean i.e., Ultra Clean and NTG Nordic go up and down completely randomly.
Pair Corralation between Ultra Clean and NTG Nordic
Assuming the 90 days horizon Ultra Clean Holdings is expected to generate 2.64 times more return on investment than NTG Nordic. However, Ultra Clean is 2.64 times more volatile than NTG Nordic Transport. It trades about 0.07 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about 0.13 per unit of risk. If you would invest 3,480 in Ultra Clean Holdings on November 27, 2024 and sell it today you would earn a total of 140.00 from holding Ultra Clean Holdings or generate 4.02% 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. NTG Nordic Transport
Performance |
| Timeline |
| Ultra Clean Holdings |
| NTG Nordic Transport |
Ultra Clean and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and NTG Nordic
The main advantage of trading using opposite Ultra Clean and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic's long position.| Ultra Clean vs. Sixt Leasing SE | Ultra Clean vs. ANTA Sports Products | Ultra Clean vs. ZINC MEDIA GR | Ultra Clean vs. LINMON MEDIA LTD |
| NTG Nordic vs. Mitsui Chemicals | NTG Nordic vs. De Grey Mining | NTG Nordic vs. Calibre Mining Corp | NTG Nordic vs. MUTUIONLINE |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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