Correlation Between ULTRA CLEAN and CCC SA

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

By analyzing existing cross correlation between ULTRA CLEAN HLDGS and CCC SA, you can compare the effects of market volatilities on ULTRA CLEAN and CCC SA 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 CCC SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ULTRA CLEAN and CCC SA.

Diversification Opportunities for ULTRA CLEAN and CCC SA

0.54

Correlation Coefficient

ULTRA CLEAN  CCC SA

Very weak diversification

The 3 months correlation between ULTRA and CCC is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding ULTRA CLEAN HLDGS and CCC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCC SA 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 HLDGS are associated (or correlated) with CCC SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCC SA has no effect on the direction of ULTRA CLEAN i.e., ULTRA CLEAN and CCC SA go up and down completely randomly.

Pair Corralation between ULTRA CLEAN and CCC SA

Assuming the 90 days trading horizon ULTRA CLEAN is expected to generate 6.9 times less return on investment than CCC SA. But when comparing it to its historical volatility, ULTRA CLEAN HLDGS is 1.15 times less risky than CCC SA. It trades about 0.02 of its potential returns per unit of risk. CCC SA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  873.00  in CCC SA on October 24, 2024 and sell it today you would earn a total of  3,329  from holding CCC SA or generate 381.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

ULTRA CLEAN HLDGS  vs.  CCC SA

ULTRA CLEAN HLDGS

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ULTRA CLEAN HLDGS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, ULTRA CLEAN exhibited solid returns over the last few months and may actually be approaching a breakup point.

CCC SA

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with ULTRA CLEAN and CCC SA

The main advantage of trading using opposite ULTRA CLEAN and CCC SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ULTRA CLEAN position performs unexpectedly, CCC SA 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 CCC SA will offset losses from the drop in CCC SA's long position.

The idea behind ULTRA CLEAN HLDGS and CCC SA 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.