Correlation Between Ultra Clean and Loews Corp
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and Loews Corp 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 Loews Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultra Clean Holdings and Loews Corp, you can compare the effects of market volatilities on Ultra Clean and Loews Corp 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 Loews Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and Loews Corp.
Diversification Opportunities for Ultra Clean and Loews Corp
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ultra and Loews is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Loews Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loews Corp 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 Holdings are associated (or correlated) with Loews Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loews Corp has no effect on the direction of Ultra Clean i.e., Ultra Clean and Loews Corp go up and down completely randomly.
Pair Corralation between Ultra Clean and Loews Corp
Given the investment horizon of 90 days Ultra Clean Holdings is expected to under-perform the Loews Corp. In addition to that, Ultra Clean is 4.19 times more volatile than Loews Corp. It trades about -0.1 of its total potential returns per unit of risk. Loews Corp is currently generating about 0.11 per unit of volatility. If you would invest 8,144 in Loews Corp on December 18, 2024 and sell it today you would earn a total of 598.00 from holding Loews Corp or generate 7.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ultra Clean Holdings vs. Loews Corp
Performance |
Timeline |
Ultra Clean Holdings |
Loews Corp |
Ultra Clean and Loews Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ultra Clean and Loews Corp
The main advantage of trading using opposite Ultra Clean and Loews Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, Loews Corp 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 Loews Corp will offset losses from the drop in Loews Corp's long position.Ultra Clean vs. Amtech Systems | Ultra Clean vs. Veeco Instruments | Ultra Clean vs. Cohu Inc | Ultra Clean vs. Onto Innovation |
Loews Corp vs. Horace Mann Educators | Loews Corp vs. Global Indemnity PLC | Loews Corp vs. Selective Insurance Group | Loews Corp vs. Kemper |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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