Correlation Between Clean Energy and ULTRA CLEAN
Can any of the company-specific risk be diversified away by investing in both Clean Energy and ULTRA CLEAN 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 Clean Energy and ULTRA CLEAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Energy Fuels and ULTRA CLEAN HLDGS, you can compare the effects of market volatilities on Clean Energy and ULTRA CLEAN 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 Clean Energy with a short position of ULTRA CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Energy and ULTRA CLEAN.
Diversification Opportunities for Clean Energy and ULTRA CLEAN
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Clean and ULTRA is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Clean Energy Fuels and ULTRA CLEAN HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ULTRA CLEAN HLDGS and Clean Energy 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 Clean Energy Fuels are associated (or correlated) with ULTRA CLEAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ULTRA CLEAN HLDGS has no effect on the direction of Clean Energy i.e., Clean Energy and ULTRA CLEAN go up and down completely randomly.
Pair Corralation between Clean Energy and ULTRA CLEAN
Assuming the 90 days horizon Clean Energy Fuels is expected to under-perform the ULTRA CLEAN. In addition to that, Clean Energy is 1.38 times more volatile than ULTRA CLEAN HLDGS. It trades about -0.04 of its total potential returns per unit of risk. ULTRA CLEAN HLDGS is currently generating about 0.08 per unit of volatility. If you would invest 3,380 in ULTRA CLEAN HLDGS on August 29, 2024 and sell it today you would earn a total of 180.00 from holding ULTRA CLEAN HLDGS or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Energy Fuels vs. ULTRA CLEAN HLDGS
Performance |
| Timeline |
| Clean Energy Fuels |
| ULTRA CLEAN HLDGS |
Clean Energy and ULTRA CLEAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Energy and ULTRA CLEAN
The main advantage of trading using opposite Clean Energy and ULTRA CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Energy position performs unexpectedly, ULTRA CLEAN 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 ULTRA CLEAN will offset losses from the drop in ULTRA CLEAN's long position.| Clean Energy vs. Coor Service Management | Clean Energy vs. The Trade Desk | Clean Energy vs. Platinum Investment Management | Clean Energy vs. Fast Retailing Co |
| ULTRA CLEAN vs. GREENX METALS LTD | ULTRA CLEAN vs. Gaztransport Technigaz SA | ULTRA CLEAN vs. TITANIUM TRANSPORTGROUP | ULTRA CLEAN vs. FIREWEED METALS P |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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