Correlation Between Ultra Clean and United Overseas
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and United Overseas 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 United Overseas 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 United Overseas Bank, you can compare the effects of market volatilities on Ultra Clean and United Overseas 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 United Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and United Overseas.
Diversification Opportunities for Ultra Clean and United Overseas
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ultra and United is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and United Overseas Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Overseas Bank 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 United Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Overseas Bank has no effect on the direction of Ultra Clean i.e., Ultra Clean and United Overseas go up and down completely randomly.
Pair Corralation between Ultra Clean and United Overseas
Assuming the 90 days horizon Ultra Clean Holdings is expected to under-perform the United Overseas. In addition to that, Ultra Clean is 2.67 times more volatile than United Overseas Bank. It trades about -0.1 of its total potential returns per unit of risk. United Overseas Bank is currently generating about 0.17 per unit of volatility. If you would invest 2,168 in United Overseas Bank on September 4, 2024 and sell it today you would earn a total of 382.00 from holding United Overseas Bank or generate 17.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Ultra Clean Holdings vs. United Overseas Bank
Performance |
| Timeline |
| Ultra Clean Holdings |
| United Overseas Bank |
Ultra Clean and United Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and United Overseas
The main advantage of trading using opposite Ultra Clean and United Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, United Overseas 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 United Overseas will offset losses from the drop in United Overseas' long position.| Ultra Clean vs. ASML HOLDING NY | Ultra Clean vs. ASML Holding NV | Ultra Clean vs. ASML Holding NV | Ultra Clean vs. Lam Research |
| United Overseas vs. Cleanaway Waste Management | United Overseas vs. INFORMATION SVC GRP | United Overseas vs. Ultra Clean Holdings | United Overseas vs. Mobilezone Holding AG |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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