Correlation Between Ultra Clean and BCE
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and BCE 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 BCE 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 BCE Inc, you can compare the effects of market volatilities on Ultra Clean and BCE 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 BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and BCE.
Diversification Opportunities for Ultra Clean and BCE
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ultra and BCE is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc 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 BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of Ultra Clean i.e., Ultra Clean and BCE go up and down completely randomly.
Pair Corralation between Ultra Clean and BCE
Given the investment horizon of 90 days Ultra Clean Holdings is expected to under-perform the BCE. In addition to that, Ultra Clean is 2.6 times more volatile than BCE Inc. It trades about -0.27 of its total potential returns per unit of risk. BCE Inc is currently generating about -0.21 per unit of volatility. If you would invest 2,446 in BCE Inc on January 7, 2025 and sell it today you would lose (175.00) from holding BCE Inc or give up 7.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Clean Holdings vs. BCE Inc
Performance |
| Timeline |
| Ultra Clean Holdings |
| BCE Inc |
Ultra Clean and BCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and BCE
The main advantage of trading using opposite Ultra Clean and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, BCE 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 BCE will offset losses from the drop in BCE's long position.| Ultra Clean vs. Amtech Systems | Ultra Clean vs. Veeco Instruments | Ultra Clean vs. Cohu Inc | Ultra Clean vs. Onto Innovation |
| BCE vs. Rogers Communications | BCE vs. America Movil SAB | BCE vs. Telus Corp | BCE vs. Telefonica Brasil SA |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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