Correlation Between Gruppo Mutuionline and ULTRA CLEAN

Can any of the company-specific risk be diversified away by investing in both Gruppo Mutuionline 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 Gruppo Mutuionline and ULTRA CLEAN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gruppo Mutuionline SpA and ULTRA CLEAN HLDGS, you can compare the effects of market volatilities on Gruppo Mutuionline 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 Gruppo Mutuionline with a short position of ULTRA CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gruppo Mutuionline and ULTRA CLEAN.

Diversification Opportunities for Gruppo Mutuionline and ULTRA CLEAN

0.43

Correlation Coefficient

Gruppo Mutuionline  ULTRA CLEAN

Very weak diversification

The 3 months correlation between Gruppo and ULTRA is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gruppo Mutuionline SpA 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 Gruppo Mutuionline 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 Gruppo Mutuionline SpA 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 Gruppo Mutuionline i.e., Gruppo Mutuionline and ULTRA CLEAN go up and down completely randomly.

Pair Corralation between Gruppo Mutuionline and ULTRA CLEAN

Assuming the 90 days trading horizon Gruppo Mutuionline SpA is expected to under-perform the ULTRA CLEAN. But the stock apears to be less risky and, when comparing its historical volatility, Gruppo Mutuionline SpA is 1.68 times less risky than ULTRA CLEAN. The stock trades about -0.14 of its potential returns per unit of risk. The ULTRA CLEAN HLDGS is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  3,560  in ULTRA CLEAN HLDGS on September 29, 2024 and sell it today you would lose (80.00) from holding ULTRA CLEAN HLDGS or give up 2.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Gruppo Mutuionline SpA  vs.  ULTRA CLEAN HLDGS

Gruppo Mutuionline SpA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gruppo Mutuionline SpA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Gruppo Mutuionline may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ULTRA CLEAN HLDGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ULTRA CLEAN HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, ULTRA CLEAN is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Gruppo Mutuionline and ULTRA CLEAN

The main advantage of trading using opposite Gruppo Mutuionline and ULTRA CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gruppo Mutuionline 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 Gruppo Mutuionline SpA and ULTRA CLEAN HLDGS 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.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.