Correlation Between ULTRA CLEAN and POLENERGIA

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

Diversification Opportunities for ULTRA CLEAN and POLENERGIA

-0.35

Correlation Coefficient

ULTRA CLEAN  POLENERGIA

Very good diversification

The 3 months correlation between ULTRA and POLENERGIA is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ULTRA CLEAN HLDGS and POLENERGIA SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POLENERGIA SA ZY 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 POLENERGIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POLENERGIA SA ZY has no effect on the direction of ULTRA CLEAN i.e., ULTRA CLEAN and POLENERGIA go up and down completely randomly.

Pair Corralation between ULTRA CLEAN and POLENERGIA

Assuming the 90 days trading horizon ULTRA CLEAN HLDGS is expected to under-perform the POLENERGIA. In addition to that, ULTRA CLEAN is 1.67 times more volatile than POLENERGIA SA ZY. It trades about 0.0 of its total potential returns per unit of risk. POLENERGIA SA ZY is currently generating about 0.01 per unit of volatility. If you would invest  1,615  in POLENERGIA SA ZY on September 27, 2024 and sell it today you would earn a total of  0.00  from holding POLENERGIA SA ZY or generate 0.0% return on investment over 90 days.

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

ULTRA CLEAN HLDGS  vs.  POLENERGIA SA ZY

ULTRA CLEAN HLDGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ULTRA CLEAN HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, ULTRA CLEAN is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

POLENERGIA SA ZY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days POLENERGIA SA ZY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, POLENERGIA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ULTRA CLEAN and POLENERGIA

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

The idea behind ULTRA CLEAN HLDGS and POLENERGIA SA ZY 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.