Correlation Between Ultra Clean and Advanced Micro

Can any of the company-specific risk be diversified away by investing in both Ultra Clean and Advanced Micro 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 Advanced Micro 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 Advanced Micro Devices, you can compare the effects of market volatilities on Ultra Clean and Advanced Micro 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 Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and Advanced Micro.

Diversification Opportunities for Ultra Clean and Advanced Micro

0.49

Correlation Coefficient

Ultra Clean  Advanced Micro

Very weak diversification

The 3 months correlation between Ultra and Advanced is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices 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 Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Ultra Clean i.e., Ultra Clean and Advanced Micro go up and down completely randomly.

Pair Corralation between Ultra Clean and Advanced Micro

Assuming the 90 days horizon Ultra Clean is expected to generate 1.88 times less return on investment than Advanced Micro. In addition to that, Ultra Clean is 1.43 times more volatile than Advanced Micro Devices. It trades about 0.13 of its total potential returns per unit of risk. Advanced Micro Devices is currently generating about 0.35 per unit of volatility. If you would invest  7,537  in Advanced Micro Devices on April 19, 2025 and sell it today you would earn a total of  6,245  from holding Advanced Micro Devices or generate 82.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Ultra Clean Holdings  vs.  Advanced Micro Devices

Ultra Clean Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ultra Clean Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ultra Clean reported solid returns over the last few months and may actually be approaching a breakup point.

Advanced Micro Devices

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Micro Devices are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Advanced Micro reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ultra Clean and Advanced Micro

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

The idea behind Ultra Clean Holdings and Advanced Micro Devices 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.