Correlation Between Ultra Clean and Biglari Holdings
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and Biglari Holdings 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 Biglari Holdings 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 Biglari Holdings, you can compare the effects of market volatilities on Ultra Clean and Biglari Holdings 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 Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and Biglari Holdings.
Diversification Opportunities for Ultra Clean and Biglari Holdings
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ultra and Biglari is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings 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 Biglari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biglari Holdings has no effect on the direction of Ultra Clean i.e., Ultra Clean and Biglari Holdings go up and down completely randomly.
Pair Corralation between Ultra Clean and Biglari Holdings
Given the investment horizon of 90 days Ultra Clean is expected to generate 4.56 times less return on investment than Biglari Holdings. In addition to that, Ultra Clean is 1.03 times more volatile than Biglari Holdings. It trades about 0.08 of its total potential returns per unit of risk. Biglari Holdings is currently generating about 0.39 per unit of volatility. If you would invest 18,548 in Biglari Holdings on September 13, 2024 and sell it today you would earn a total of 4,531 from holding Biglari Holdings or generate 24.43% 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. Biglari Holdings
Performance |
| Timeline |
| Ultra Clean Holdings |
| Biglari Holdings |
Ultra Clean and Biglari Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and Biglari Holdings
The main advantage of trading using opposite Ultra Clean and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, Biglari Holdings 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 Biglari Holdings will offset losses from the drop in Biglari Holdings' long position.| Ultra Clean vs. ON Semiconductor | Ultra Clean vs. Monolithic Power Systems | Ultra Clean vs. Globalfoundries | Ultra Clean vs. Wisekey International Holding |
| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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