Correlation Between Ultra Clean and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and Yuexiu Transport 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 Yuexiu Transport 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 Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on Ultra Clean and Yuexiu Transport 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 Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and Yuexiu Transport.
Diversification Opportunities for Ultra Clean and Yuexiu Transport
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ultra and Yuexiu is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf 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 Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of Ultra Clean i.e., Ultra Clean and Yuexiu Transport go up and down completely randomly.
Pair Corralation between Ultra Clean and Yuexiu Transport
Given the investment horizon of 90 days Ultra Clean is expected to generate 7.45 times less return on investment than Yuexiu Transport. But when comparing it to its historical volatility, Ultra Clean Holdings is 1.01 times less risky than Yuexiu Transport. It trades about 0.01 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Yuexiu Transport Infrastructure on November 2, 2024 and sell it today you would earn a total of 40.00 from holding Yuexiu Transport Infrastructure or generate 222.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ultra Clean Holdings vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| Ultra Clean Holdings |
| Yuexiu Transport Inf |
Ultra Clean and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and Yuexiu Transport
The main advantage of trading using opposite Ultra Clean and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, Yuexiu Transport 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 Yuexiu Transport will offset losses from the drop in Yuexiu Transport's long position.| Ultra Clean vs. Amtech Systems | Ultra Clean vs. Veeco Instruments | Ultra Clean vs. Cohu Inc | Ultra Clean vs. Onto Innovation |
| Yuexiu Transport vs. Zhejiang Expressway Co | Yuexiu Transport vs. Jiangsu Expressway Co | Yuexiu Transport vs. Jiangsu Expressway | Yuexiu Transport vs. Verra Mobility Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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