Correlation Between Ultra Clean and Lattice Semiconductor

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

Diversification Opportunities for Ultra Clean and Lattice Semiconductor

0.56

Correlation Coefficient

Ultra Clean  Lattice Semiconductor

Very weak diversification

The 3 months correlation between Ultra and Lattice is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Lattice Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lattice Semiconductor 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 Lattice Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lattice Semiconductor has no effect on the direction of Ultra Clean i.e., Ultra Clean and Lattice Semiconductor go up and down completely randomly.

Pair Corralation between Ultra Clean and Lattice Semiconductor

Assuming the 90 days horizon Ultra Clean Holdings is expected to generate 0.99 times more return on investment than Lattice Semiconductor. However, Ultra Clean Holdings is 1.01 times less risky than Lattice Semiconductor. It trades about 0.04 of its potential returns per unit of risk. Lattice Semiconductor is currently generating about 0.04 per unit of risk. If you would invest  1,920  in Ultra Clean Holdings on April 25, 2025 and sell it today you would earn a total of  100.00  from holding Ultra Clean Holdings or generate 5.21% return on investment over 90 days.

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

Ultra Clean Holdings  vs.  Lattice Semiconductor

Ultra Clean Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ultra Clean Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ultra Clean may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Lattice Semiconductor

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lattice Semiconductor are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Lattice Semiconductor may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Ultra Clean and Lattice Semiconductor

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

The idea behind Ultra Clean Holdings and Lattice Semiconductor 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.