Correlation Between ITM Semiconductor and Raontech
Can any of the company-specific risk be diversified away by investing in both ITM Semiconductor and Raontech 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 ITM Semiconductor and Raontech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITM Semiconductor Co and Raontech, you can compare the effects of market volatilities on ITM Semiconductor and Raontech 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 ITM Semiconductor with a short position of Raontech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITM Semiconductor and Raontech.
Diversification Opportunities for ITM Semiconductor and Raontech
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ITM and Raontech is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding ITM Semiconductor Co and Raontech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raontech and ITM Semiconductor 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 ITM Semiconductor Co are associated (or correlated) with Raontech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raontech has no effect on the direction of ITM Semiconductor i.e., ITM Semiconductor and Raontech go up and down completely randomly.
Pair Corralation between ITM Semiconductor and Raontech
Assuming the 90 days trading horizon ITM Semiconductor Co is expected to under-perform the Raontech. In addition to that, ITM Semiconductor is 1.0 times more volatile than Raontech. It trades about -0.38 of its total potential returns per unit of risk. Raontech is currently generating about -0.17 per unit of volatility. If you would invest 324,000 in Raontech on September 1, 2024 and sell it today you would lose (30,500) from holding Raontech or give up 9.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITM Semiconductor Co vs. Raontech
Performance |
| Timeline |
| ITM Semiconductor |
| Raontech |
ITM Semiconductor and Raontech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITM Semiconductor and Raontech
The main advantage of trading using opposite ITM Semiconductor and Raontech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITM Semiconductor position performs unexpectedly, Raontech 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 Raontech will offset losses from the drop in Raontech's long position.| ITM Semiconductor vs. SK Hynix | ITM Semiconductor vs. LX Semicon Co | ITM Semiconductor vs. Tokai Carbon Korea | ITM Semiconductor vs. People Technology |
| Raontech vs. QUALITAS SEMICONDUCTOR LTD | Raontech vs. ITM Semiconductor Co | Raontech vs. Hanmi Semiconductor Co | Raontech vs. Digital Power Communications |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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