Correlation Between Ultra Clean and CLEAN ENERGY
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and CLEAN ENERGY 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 CLEAN ENERGY 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 CLEAN ENERGY FUELS, you can compare the effects of market volatilities on Ultra Clean and CLEAN ENERGY 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 CLEAN ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and CLEAN ENERGY.
Diversification Opportunities for Ultra Clean and CLEAN ENERGY
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ultra and CLEAN is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and CLEAN ENERGY FUELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLEAN ENERGY FUELS 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 CLEAN ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLEAN ENERGY FUELS has no effect on the direction of Ultra Clean i.e., Ultra Clean and CLEAN ENERGY go up and down completely randomly.
Pair Corralation between Ultra Clean and CLEAN ENERGY
Assuming the 90 days horizon Ultra Clean is expected to generate 1.39 times less return on investment than CLEAN ENERGY. But when comparing it to its historical volatility, Ultra Clean Holdings is 1.56 times less risky than CLEAN ENERGY. It trades about 0.07 of its potential returns per unit of risk. CLEAN ENERGY FUELS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 263.00 in CLEAN ENERGY FUELS on October 25, 2024 and sell it today you would earn a total of 16.00 from holding CLEAN ENERGY FUELS or generate 6.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Clean Holdings vs. CLEAN ENERGY FUELS
Performance |
| Timeline |
| Ultra Clean Holdings |
| CLEAN ENERGY FUELS |
Ultra Clean and CLEAN ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and CLEAN ENERGY
The main advantage of trading using opposite Ultra Clean and CLEAN ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, CLEAN ENERGY 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 CLEAN ENERGY will offset losses from the drop in CLEAN ENERGY's long position.| Ultra Clean vs. ASML Holding NV | Ultra Clean vs. Applied Materials | Ultra Clean vs. KLA Corporation | Ultra Clean vs. Teradyne |
| CLEAN ENERGY vs. SIERRA METALS | CLEAN ENERGY vs. Nippon Light Metal | CLEAN ENERGY vs. NTG Nordic Transport | CLEAN ENERGY vs. SOEDER SPORTFISKE AB |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |