Correlation Between Ultra Clean and Kering SA
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and Kering SA 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 Kering SA 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 Kering SA, you can compare the effects of market volatilities on Ultra Clean and Kering SA 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 Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and Kering SA.
Diversification Opportunities for Ultra Clean and Kering SA
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ultra and Kering is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA 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 Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of Ultra Clean i.e., Ultra Clean and Kering SA go up and down completely randomly.
Pair Corralation between Ultra Clean and Kering SA
Assuming the 90 days horizon Ultra Clean is expected to generate 6.12 times less return on investment than Kering SA. In addition to that, Ultra Clean is 1.0 times more volatile than Kering SA. It trades about 0.03 of its total potential returns per unit of risk. Kering SA is currently generating about 0.18 per unit of volatility. If you would invest 20,954 in Kering SA on October 26, 2024 and sell it today you would earn a total of 3,541 from holding Kering SA or generate 16.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Clean Holdings vs. Kering SA
Performance |
| Timeline |
| Ultra Clean Holdings |
| Kering SA |
Ultra Clean and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and Kering SA
The main advantage of trading using opposite Ultra Clean and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA's long position.| Ultra Clean vs. VARIOUS EATERIES LS | Ultra Clean vs. DICKER DATA LTD | Ultra Clean vs. Automatic Data Processing | Ultra Clean vs. BJs Restaurants |
| Kering SA vs. Ultra Clean Holdings | Kering SA vs. MARKET VECTR RETAIL | Kering SA vs. BJs Wholesale Club | Kering SA vs. Carnegie Clean Energy |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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