Correlation Between ULTRA CLEAN and ENGIE Eps

Can any of the company-specific risk be diversified away by investing in both ULTRA CLEAN and ENGIE Eps 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 ENGIE Eps 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 ENGIE Eps SA, you can compare the effects of market volatilities on ULTRA CLEAN and ENGIE Eps 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 ENGIE Eps. Check out your portfolio center. Please also check ongoing floating volatility patterns of ULTRA CLEAN and ENGIE Eps.

Diversification Opportunities for ULTRA CLEAN and ENGIE Eps

0.02

Correlation Coefficient

ULTRA CLEAN  ENGIE Eps

Significant diversification

The 3 months correlation between ULTRA and ENGIE is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding ULTRA CLEAN HLDGS and ENGIE Eps SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENGIE Eps 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 ENGIE Eps. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENGIE Eps SA has no effect on the direction of ULTRA CLEAN i.e., ULTRA CLEAN and ENGIE Eps go up and down completely randomly.

Pair Corralation between ULTRA CLEAN and ENGIE Eps

If you would invest  3,540  in ULTRA CLEAN HLDGS on October 6, 2024 and sell it today you would earn a total of  80.00  from holding ULTRA CLEAN HLDGS or generate 2.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	29.41%
Values	Daily Returns

ULTRA CLEAN HLDGS  vs.  ENGIE Eps SA

ULTRA CLEAN HLDGS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ULTRA CLEAN HLDGS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, ULTRA CLEAN is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

ENGIE Eps SA

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days ENGIE Eps SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, ENGIE Eps reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ULTRA CLEAN and ENGIE Eps

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

The idea behind ULTRA CLEAN HLDGS and ENGIE Eps 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.