Correlation Between Arm Holdings and InTest
Can any of the company-specific risk be diversified away by investing in both Arm Holdings and InTest 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 Arm Holdings and InTest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arm Holdings plc and inTest, you can compare the effects of market volatilities on Arm Holdings and InTest 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 Arm Holdings with a short position of InTest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arm Holdings and InTest.
Diversification Opportunities for Arm Holdings and InTest
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Arm and InTest is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Arm Holdings plc and inTest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on inTest and Arm Holdings 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 Arm Holdings plc are associated (or correlated) with InTest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of inTest has no effect on the direction of Arm Holdings i.e., Arm Holdings and InTest go up and down completely randomly.
Pair Corralation between Arm Holdings and InTest
Considering the 90-day investment horizon Arm Holdings plc is expected to under-perform the InTest. But the stock apears to be less risky and, when comparing its historical volatility, Arm Holdings plc is 1.47 times less risky than InTest. The stock trades about -0.46 of its potential returns per unit of risk. The inTest is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 806.00 in inTest on September 29, 2025 and sell it today you would lose (54.00) from holding inTest or give up 6.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arm Holdings plc vs. inTest
Performance |
| Timeline |
| Arm Holdings plc |
| inTest |
Arm Holdings and InTest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arm Holdings and InTest
The main advantage of trading using opposite Arm Holdings and InTest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arm Holdings position performs unexpectedly, InTest 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 InTest will offset losses from the drop in InTest's long position.| Arm Holdings vs. Applied Materials | Arm Holdings vs. Qualcomm Incorporated | Arm Holdings vs. Intel | Arm Holdings vs. KLA Tencor |
| InTest vs. Amtech Systems | InTest vs. MagnaChip Semiconductor | InTest vs. QuickLogic | InTest vs. Mobix Labs |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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