Correlation Between SEI INVESTMENTS and Ultra Clean

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

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

Diversification Opportunities for SEI INVESTMENTS and Ultra Clean

-0.73

Correlation Coefficient

SEI INVESTMENTS  Ultra Clean

Pay attention - limited upside

The 3 months correlation between SEI and Ultra is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS 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 SEI INVESTMENTS 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 SEI INVESTMENTS 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 SEI INVESTMENTS i.e., SEI INVESTMENTS and Ultra Clean go up and down completely randomly.

Pair Corralation between SEI INVESTMENTS and Ultra Clean

Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 0.35 times more return on investment than Ultra Clean. However, SEI INVESTMENTS is 2.87 times less risky than Ultra Clean. It trades about 0.48 of its potential returns per unit of risk. Ultra Clean Holdings is currently generating about 0.14 per unit of risk. If you would invest  7,550  in SEI INVESTMENTS on September 18, 2024 and sell it today you would earn a total of  650.00  from holding SEI INVESTMENTS or generate 8.61% return on investment over 90 days.

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

SEI INVESTMENTS  vs.  Ultra Clean Holdings

SEI INVESTMENTS

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in SEI INVESTMENTS are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SEI INVESTMENTS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ultra Clean Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ultra Clean Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SEI INVESTMENTS and Ultra Clean

The main advantage of trading using opposite SEI INVESTMENTS and Ultra Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI INVESTMENTS 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 SEI INVESTMENTS 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.