Correlation Between Advantest and Lasertec
Can any of the company-specific risk be diversified away by investing in both Advantest and Lasertec 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 Advantest and Lasertec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantest and Lasertec, you can compare the effects of market volatilities on Advantest and Lasertec 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 Advantest with a short position of Lasertec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantest and Lasertec.
Diversification Opportunities for Advantest and Lasertec
Excellent diversification
The 3 months correlation between Advantest and Lasertec is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Advantest and Lasertec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lasertec and Advantest 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 Advantest are associated (or correlated) with Lasertec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lasertec has no effect on the direction of Advantest i.e., Advantest and Lasertec go up and down completely randomly.
Pair Corralation between Advantest and Lasertec
Assuming the 90 days horizon Advantest is expected to under-perform the Lasertec. In addition to that, Advantest is 1.49 times more volatile than Lasertec. It trades about -0.08 of its total potential returns per unit of risk. Lasertec is currently generating about 0.17 per unit of volatility. If you would invest 1,891 in Lasertec on November 3, 2024 and sell it today you would earn a total of 183.00 from holding Lasertec or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advantest vs. Lasertec
Performance |
| Timeline |
| Advantest |
| Lasertec |
Advantest and Lasertec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantest and Lasertec
The main advantage of trading using opposite Advantest and Lasertec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantest position performs unexpectedly, Lasertec 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 Lasertec will offset losses from the drop in Lasertec's long position.| Advantest vs. Tokyo Electron | Advantest vs. Ultra Clean Holdings | Advantest vs. Applied Materials | Advantest vs. Sumco Corp ADR |
| Lasertec vs. Sumco Corp ADR | Lasertec vs. Asm Pacific Technology | Lasertec vs. Tokyo Electron | Lasertec vs. Advantest |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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