Correlation Between Ultra Clean and InTest
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and InTest 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 InTest 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 inTest, you can compare the effects of market volatilities on Ultra Clean and InTest 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 InTest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and InTest.
Diversification Opportunities for Ultra Clean and InTest
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ultra and InTest is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and inTest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on inTest 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 InTest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of inTest has no effect on the direction of Ultra Clean i.e., Ultra Clean and InTest go up and down completely randomly.
Pair Corralation between Ultra Clean and InTest
Given the investment horizon of 90 days Ultra Clean Holdings is expected to under-perform the InTest. But the stock apears to be less risky and, when comparing its historical volatility, Ultra Clean Holdings is 1.27 times less risky than InTest. The stock trades about -0.09 of its potential returns per unit of risk. The inTest is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 950.00 in inTest on November 5, 2024 and sell it today you would lose (35.00) from holding inTest or give up 3.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Clean Holdings vs. inTest
Performance |
| Timeline |
| Ultra Clean Holdings |
| inTest |
Ultra Clean and InTest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and InTest
The main advantage of trading using opposite Ultra Clean and InTest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, InTest 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 InTest will offset losses from the drop in InTest's long position.| Ultra Clean vs. Amtech Systems | Ultra Clean vs. Veeco Instruments | Ultra Clean vs. Cohu Inc | Ultra Clean vs. Onto Innovation |
| InTest vs. Axcelis Technologies | InTest vs. Lam Research Corp | InTest vs. Photronics | InTest vs. indie Semiconductor |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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