Correlation Between Inflection Point and Ultra Clean

Can any of the company-specific risk be diversified away by investing in both Inflection Point 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 Inflection Point and Ultra Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Inflection Point Acquisition and Ultra Clean Holdings, you can compare the effects of market volatilities on Inflection Point 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 Inflection Point with a short position of Ultra Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and Ultra Clean.

Diversification Opportunities for Inflection Point and Ultra Clean

0.17

Correlation Coefficient

Inflection Point  Ultra Clean

Average diversification

The 3 months correlation between Inflection and Ultra is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and Ultra Clean Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Clean Holdings and Inflection Point 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 Inflection Point Acquisition 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 Holdings has no effect on the direction of Inflection Point i.e., Inflection Point and Ultra Clean go up and down completely randomly.

Pair Corralation between Inflection Point and Ultra Clean

Assuming the 90 days horizon Inflection Point Acquisition is expected to generate 17.71 times more return on investment than Ultra Clean. However, Inflection Point is 17.71 times more volatile than Ultra Clean Holdings. It trades about 0.05 of its potential returns per unit of risk. Ultra Clean Holdings is currently generating about 0.01 per unit of risk. If you would invest  0.00  in Inflection Point Acquisition on October 24, 2024 and sell it today you would earn a total of  1,295  from holding Inflection Point Acquisition or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	84.41%
Values	Daily Returns

Inflection Point Acquisition  vs.  Ultra Clean Holdings

Inflection Point Acq

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Inflection Point unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ultra Clean Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ultra Clean Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ultra Clean may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Inflection Point and Ultra Clean

The main advantage of trading using opposite Inflection Point and Ultra Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point 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.

The idea behind Inflection Point Acquisition and Ultra Clean Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 CEOs Directory module to screen CEOs from public companies around the world.