Correlation Between Ultra Clean and UNIQA INSURANCE
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and UNIQA INSURANCE 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 UNIQA INSURANCE 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 UNIQA INSURANCE GR, you can compare the effects of market volatilities on Ultra Clean and UNIQA INSURANCE 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 UNIQA INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and UNIQA INSURANCE.
Diversification Opportunities for Ultra Clean and UNIQA INSURANCE
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ultra and UNIQA is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and UNIQA INSURANCE GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIQA INSURANCE GR 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 UNIQA INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIQA INSURANCE GR has no effect on the direction of Ultra Clean i.e., Ultra Clean and UNIQA INSURANCE go up and down completely randomly.
Pair Corralation between Ultra Clean and UNIQA INSURANCE
Assuming the 90 days horizon Ultra Clean Holdings is expected to generate 5.7 times more return on investment than UNIQA INSURANCE. However, Ultra Clean is 5.7 times more volatile than UNIQA INSURANCE GR. It trades about 0.17 of its potential returns per unit of risk. UNIQA INSURANCE GR is currently generating about 0.54 per unit of risk. If you would invest 3,480 in Ultra Clean Holdings on October 20, 2024 and sell it today you would earn a total of 260.00 from holding Ultra Clean Holdings or generate 7.47% 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. UNIQA INSURANCE GR
Performance |
Timeline |
Ultra Clean Holdings |
UNIQA INSURANCE GR |
Ultra Clean and UNIQA INSURANCE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ultra Clean and UNIQA INSURANCE
The main advantage of trading using opposite Ultra Clean and UNIQA INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, UNIQA INSURANCE 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 UNIQA INSURANCE will offset losses from the drop in UNIQA INSURANCE's long position.Ultra Clean vs. CarsalesCom | Ultra Clean vs. Teradata Corp | Ultra Clean vs. DATATEC LTD 2 | Ultra Clean vs. Grupo Carso SAB |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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