Correlation Between Ultra Clean and Stag Industrial
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and Stag Industrial 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 Stag Industrial 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 Stag Industrial, you can compare the effects of market volatilities on Ultra Clean and Stag Industrial 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 Stag Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and Stag Industrial.
Diversification Opportunities for Ultra Clean and Stag Industrial
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ultra and Stag is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Stag Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stag Industrial 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 Stag Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stag Industrial has no effect on the direction of Ultra Clean i.e., Ultra Clean and Stag Industrial go up and down completely randomly.
Pair Corralation between Ultra Clean and Stag Industrial
Assuming the 90 days horizon Ultra Clean Holdings is expected to under-perform the Stag Industrial. In addition to that, Ultra Clean is 2.71 times more volatile than Stag Industrial. It trades about -0.11 of its total potential returns per unit of risk. Stag Industrial is currently generating about 0.14 per unit of volatility. If you would invest 3,211 in Stag Industrial on November 2, 2024 and sell it today you would earn a total of 92.00 from holding Stag Industrial or generate 2.87% 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. Stag Industrial
Performance |
| Timeline |
| Ultra Clean Holdings |
| Stag Industrial |
Ultra Clean and Stag Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and Stag Industrial
The main advantage of trading using opposite Ultra Clean and Stag Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, Stag Industrial 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 Stag Industrial will offset losses from the drop in Stag Industrial's long position.| Ultra Clean vs. CN DATANG C | Ultra Clean vs. INFORMATION SVC GRP | Ultra Clean vs. ECHO INVESTMENT ZY | Ultra Clean vs. DATATEC LTD 2 |
| Stag Industrial vs. FAST RETAIL ADR | Stag Industrial vs. CARSALESCOM | Stag Industrial vs. Gol Intelligent Airlines | Stag Industrial vs. CarsalesCom |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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