Correlation Between Ultra Clean and Kodiak Gas
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and Kodiak Gas 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 Kodiak Gas 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 Kodiak Gas Services,, you can compare the effects of market volatilities on Ultra Clean and Kodiak Gas 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 Kodiak Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and Kodiak Gas.
Diversification Opportunities for Ultra Clean and Kodiak Gas
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ultra and Kodiak is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Kodiak Gas Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodiak Gas Services, 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 Kodiak Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kodiak Gas Services, has no effect on the direction of Ultra Clean i.e., Ultra Clean and Kodiak Gas go up and down completely randomly.
Pair Corralation between Ultra Clean and Kodiak Gas
Given the investment horizon of 90 days Ultra Clean is expected to generate 6.02 times less return on investment than Kodiak Gas. In addition to that, Ultra Clean is 1.39 times more volatile than Kodiak Gas Services,. It trades about 0.02 of its total potential returns per unit of risk. Kodiak Gas Services, is currently generating about 0.15 per unit of volatility. If you would invest 1,555 in Kodiak Gas Services, on September 12, 2024 and sell it today you would earn a total of 2,611 from holding Kodiak Gas Services, or generate 167.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Clean Holdings vs. Kodiak Gas Services,
Performance |
| Timeline |
| Ultra Clean Holdings |
| Kodiak Gas Services, |
Ultra Clean and Kodiak Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and Kodiak Gas
The main advantage of trading using opposite Ultra Clean and Kodiak Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, Kodiak Gas 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 Kodiak Gas will offset losses from the drop in Kodiak Gas' long position.| Ultra Clean vs. Teradyne | Ultra Clean vs. Onto Innovation | Ultra Clean vs. Cohu Inc | Ultra Clean vs. Entegris |
| Kodiak Gas vs. Lion One Metals | Kodiak Gas vs. Luxfer Holdings PLC | Kodiak Gas vs. Yuexiu Transport Infrastructure | Kodiak Gas vs. Sealed Air |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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