Correlation Between Ultra Clean and Steven Madden
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and Steven Madden 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 Steven Madden 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 Steven Madden, you can compare the effects of market volatilities on Ultra Clean and Steven Madden 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 Steven Madden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and Steven Madden.
Diversification Opportunities for Ultra Clean and Steven Madden
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ultra and Steven is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Steven Madden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steven Madden 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 Steven Madden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steven Madden has no effect on the direction of Ultra Clean i.e., Ultra Clean and Steven Madden go up and down completely randomly.
Pair Corralation between Ultra Clean and Steven Madden
Given the investment horizon of 90 days Ultra Clean Holdings is expected to under-perform the Steven Madden. In addition to that, Ultra Clean is 1.91 times more volatile than Steven Madden. It trades about -0.03 of its total potential returns per unit of risk. Steven Madden is currently generating about 0.01 per unit of volatility. If you would invest 4,428 in Steven Madden on August 30, 2024 and sell it today you would earn a total of 56.00 from holding Steven Madden or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Clean Holdings vs. Steven Madden
Performance |
| Timeline |
| Ultra Clean Holdings |
| Steven Madden |
Ultra Clean and Steven Madden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and Steven Madden
The main advantage of trading using opposite Ultra Clean and Steven Madden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, Steven Madden 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 Steven Madden will offset losses from the drop in Steven Madden's long position.| Ultra Clean vs. Amtech Systems | Ultra Clean vs. Veeco Instruments | Ultra Clean vs. Cohu Inc | Ultra Clean vs. Onto Innovation |
| Steven Madden vs. Weyco Group | Steven Madden vs. Caleres | Steven Madden vs. Rocky Brands | Steven Madden vs. Designer Brands |
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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