Correlation Between Ultra Clean and Applied Opt
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and Applied Opt 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 Applied Opt 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 Applied Opt, you can compare the effects of market volatilities on Ultra Clean and Applied Opt 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 Applied Opt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and Applied Opt.
Diversification Opportunities for Ultra Clean and Applied Opt
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ultra and Applied is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Applied Opt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Opt 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 Applied Opt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Opt has no effect on the direction of Ultra Clean i.e., Ultra Clean and Applied Opt go up and down completely randomly.
Pair Corralation between Ultra Clean and Applied Opt
Given the investment horizon of 90 days Ultra Clean is expected to generate 20.55 times less return on investment than Applied Opt. But when comparing it to its historical volatility, Ultra Clean Holdings is 3.02 times less risky than Applied Opt. It trades about 0.02 of its potential returns per unit of risk. Applied Opt is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 312.00 in Applied Opt on August 31, 2024 and sell it today you would earn a total of 3,810 from holding Applied Opt or generate 1221.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Clean Holdings vs. Applied Opt
Performance |
| Timeline |
| Ultra Clean Holdings |
| Applied Opt |
Ultra Clean and Applied Opt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and Applied Opt
The main advantage of trading using opposite Ultra Clean and Applied Opt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, Applied Opt 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 Applied Opt will offset losses from the drop in Applied Opt's long position.| Ultra Clean vs. Amtech Systems | Ultra Clean vs. Veeco Instruments | Ultra Clean vs. Cohu Inc | Ultra Clean vs. Onto Innovation |
| Applied Opt vs. Lumentum Holdings | Applied Opt vs. Ichor Holdings | Applied Opt vs. Fabrinet | Applied Opt vs. Hello Group |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |