Correlation Between Ultra Clean and Soho House
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and Soho House 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 Soho House 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 Soho House Co, you can compare the effects of market volatilities on Ultra Clean and Soho House 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 Soho House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and Soho House.
Diversification Opportunities for Ultra Clean and Soho House
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ultra and Soho is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Soho House Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soho House 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 Soho House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soho House has no effect on the direction of Ultra Clean i.e., Ultra Clean and Soho House go up and down completely randomly.
Pair Corralation between Ultra Clean and Soho House
Given the investment horizon of 90 days Ultra Clean is expected to generate 15.96 times less return on investment than Soho House. But when comparing it to its historical volatility, Ultra Clean Holdings is 5.17 times less risky than Soho House. It trades about 0.09 of its potential returns per unit of risk. Soho House Co is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 471.00 in Soho House Co on October 9, 2024 and sell it today you would earn a total of 291.00 from holding Soho House Co or generate 61.78% 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. Soho House Co
Performance |
Timeline |
Ultra Clean Holdings |
Soho House |
Ultra Clean and Soho House Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ultra Clean and Soho House
The main advantage of trading using opposite Ultra Clean and Soho House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, Soho House 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 Soho House will offset losses from the drop in Soho House's long position.Ultra Clean vs. Amtech Systems | Ultra Clean vs. Veeco Instruments | Ultra Clean vs. Cohu Inc | Ultra Clean vs. Onto Innovation |
Soho House vs. Imax Corp | Soho House vs. Reservoir Media | Soho House vs. Sphere Entertainment Co | Soho House vs. NETGEAR |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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