Correlation Between ABOV Semiconductor and ITM Semiconductor
Can any of the company-specific risk be diversified away by investing in both ABOV Semiconductor and ITM 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 ABOV Semiconductor and ITM Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABOV Semiconductor Co and ITM Semiconductor Co, you can compare the effects of market volatilities on ABOV Semiconductor and ITM 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 ABOV Semiconductor with a short position of ITM Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABOV Semiconductor and ITM Semiconductor.
Diversification Opportunities for ABOV Semiconductor and ITM Semiconductor
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABOV and ITM is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding ABOV Semiconductor Co and ITM Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Semiconductor and ABOV 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 ABOV Semiconductor Co are associated (or correlated) with ITM Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Semiconductor has no effect on the direction of ABOV Semiconductor i.e., ABOV Semiconductor and ITM Semiconductor go up and down completely randomly.
Pair Corralation between ABOV Semiconductor and ITM Semiconductor
Assuming the 90 days trading horizon ABOV Semiconductor Co is expected to generate 1.28 times more return on investment than ITM Semiconductor. However, ABOV Semiconductor is 1.28 times more volatile than ITM Semiconductor Co. It trades about 0.01 of its potential returns per unit of risk. ITM Semiconductor Co is currently generating about -0.03 per unit of risk. If you would invest 912,744 in ABOV Semiconductor Co on September 2, 2024 and sell it today you would lose (133,744) from holding ABOV Semiconductor Co or give up 14.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABOV Semiconductor Co vs. ITM Semiconductor Co
Performance |
| Timeline |
| ABOV Semiconductor |
| ITM Semiconductor |
ABOV Semiconductor and ITM Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABOV Semiconductor and ITM Semiconductor
The main advantage of trading using opposite ABOV Semiconductor and ITM Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABOV Semiconductor position performs unexpectedly, ITM 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 ITM Semiconductor will offset losses from the drop in ITM Semiconductor's long position.| ABOV Semiconductor vs. Dongsin Engineering Construction | ABOV Semiconductor vs. Doosan Fuel Cell | ABOV Semiconductor vs. Daishin Balance 1 | ABOV Semiconductor vs. Total Soft Bank |
| ITM Semiconductor vs. SK Hynix | ITM Semiconductor vs. LX Semicon Co | ITM Semiconductor vs. People Technology | ITM Semiconductor vs. SIMMTECH Co |
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.
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