Correlation Between MaxLinear and Ultra Clean

Can any of the company-specific risk be diversified away by investing in both MaxLinear and Ultra Clean 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 MaxLinear and Ultra Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MaxLinear and Ultra Clean Holdings, you can compare the effects of market volatilities on MaxLinear and Ultra Clean 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 MaxLinear with a short position of Ultra Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of MaxLinear and Ultra Clean.

Diversification Opportunities for MaxLinear and Ultra Clean

0.86

Correlation Coefficient

MaxLinear  Ultra Clean

Very poor diversification

The 3 months correlation between MaxLinear and Ultra is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding MaxLinear and Ultra Clean Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Clean Holdings and MaxLinear 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 MaxLinear are associated (or correlated) with Ultra Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra Clean Holdings has no effect on the direction of MaxLinear i.e., MaxLinear and Ultra Clean go up and down completely randomly.

Pair Corralation between MaxLinear and Ultra Clean

Considering the 90-day investment horizon MaxLinear is expected to generate 0.99 times more return on investment than Ultra Clean. However, MaxLinear is 1.01 times less risky than Ultra Clean. It trades about 0.19 of its potential returns per unit of risk. Ultra Clean Holdings is currently generating about 0.08 per unit of risk. If you would invest  1,063  in MaxLinear on May 4, 2025 and sell it today you would earn a total of  458.00  from holding MaxLinear or generate 43.09% return on investment over 90 days.

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

MaxLinear  vs.  Ultra Clean Holdings

MaxLinear

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MaxLinear are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, MaxLinear disclosed solid returns over the last few months and may actually be approaching a breakup point.

Ultra Clean Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ultra Clean Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ultra Clean unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MaxLinear and Ultra Clean

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

The idea behind MaxLinear and Ultra Clean 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.