Correlation Between Ultra Clean and CleanGo Innovations
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and CleanGo Innovations 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 CleanGo Innovations 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 CleanGo Innovations, you can compare the effects of market volatilities on Ultra Clean and CleanGo Innovations 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 CleanGo Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and CleanGo Innovations.
Diversification Opportunities for Ultra Clean and CleanGo Innovations
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ultra and CleanGo is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and CleanGo Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanGo Innovations 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 CleanGo Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanGo Innovations has no effect on the direction of Ultra Clean i.e., Ultra Clean and CleanGo Innovations go up and down completely randomly.
Pair Corralation between Ultra Clean and CleanGo Innovations
Given the investment horizon of 90 days Ultra Clean Holdings is expected to generate 0.6 times more return on investment than CleanGo Innovations. However, Ultra Clean Holdings is 1.66 times less risky than CleanGo Innovations. It trades about 0.02 of its potential returns per unit of risk. CleanGo Innovations is currently generating about -0.23 per unit of risk. If you would invest 3,595 in Ultra Clean Holdings on November 1, 2024 and sell it today you would earn a total of 4.50 from holding Ultra Clean Holdings or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ultra Clean Holdings vs. CleanGo Innovations
Performance |
| Timeline |
| Ultra Clean Holdings |
| CleanGo Innovations |
Ultra Clean and CleanGo Innovations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and CleanGo Innovations
The main advantage of trading using opposite Ultra Clean and CleanGo Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, CleanGo Innovations 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 CleanGo Innovations will offset losses from the drop in CleanGo Innovations' long position.| Ultra Clean vs. Diodes Incorporated | Ultra Clean vs. Daqo New Energy | Ultra Clean vs. Micron Technology | Ultra Clean vs. MagnaChip Semiconductor |
| CleanGo Innovations vs. Valneva SE ADR | CleanGo Innovations vs. Air Transport Services | CleanGo Innovations vs. International Consolidated Airlines | CleanGo Innovations vs. flyExclusive, |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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