Correlation Between Ultra Clean and Public Storage
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and Public Storage 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 Public Storage 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 Public Storage, you can compare the effects of market volatilities on Ultra Clean and Public Storage 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and Public Storage.
Diversification Opportunities for Ultra Clean and Public Storage
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ultra and Public is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Ultra Clean i.e., Ultra Clean and Public Storage go up and down completely randomly.
Pair Corralation between Ultra Clean and Public Storage
Assuming the 90 days horizon Ultra Clean Holdings is expected to generate 1.65 times more return on investment than Public Storage. However, Ultra Clean is 1.65 times more volatile than Public Storage. It trades about 0.21 of its potential returns per unit of risk. Public Storage is currently generating about 0.3 per unit of risk. If you would invest 3,120 in Ultra Clean Holdings on September 2, 2024 and sell it today you would earn a total of 380.00 from holding Ultra Clean Holdings or generate 12.18% 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. Public Storage
Performance |
| Timeline |
| Ultra Clean Holdings |
| Public Storage |
Ultra Clean and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and Public Storage
The main advantage of trading using opposite Ultra Clean and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage's long position.| Ultra Clean vs. SENECA FOODS A | Ultra Clean vs. OURGAME INTHOLDL 00005 | Ultra Clean vs. AUSNUTRIA DAIRY | Ultra Clean vs. QINGCI GAMES INC |
| Public Storage vs. GALENA MINING LTD | Public Storage vs. Monster Beverage Corp | Public Storage vs. Fevertree Drinks PLC | Public Storage vs. MAGNUM MINING EXP |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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