Correlation Between Ultra Clean and Transport International

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

Diversification Opportunities for Ultra Clean and Transport International

0.02

Correlation Coefficient

Ultra Clean  Transport International

Significant diversification

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

Pair Corralation between Ultra Clean and Transport International

Assuming the 90 days horizon Ultra Clean Holdings is expected to generate 1.17 times more return on investment than Transport International. However, Ultra Clean is 1.17 times more volatile than Transport International Holdings. It trades about 0.14 of its potential returns per unit of risk. Transport International Holdings is currently generating about 0.06 per unit of risk. If you would invest  1,620  in Ultra Clean Holdings on April 22, 2025 and sell it today you would earn a total of  580.00  from holding Ultra Clean Holdings or generate 35.8% return on investment over 90 days.

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

Ultra Clean Holdings  vs.  Transport International Holdin

Ultra Clean Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ultra Clean Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Ultra Clean reported solid returns over the last few months and may actually be approaching a breakup point.

Transport International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Transport International Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Transport International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Ultra Clean and Transport International

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

The idea behind Ultra Clean Holdings and Transport International Holdings 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 Transaction History module to view history of all your transactions and understand their impact on performance.