Correlation Between Amtech Systems and Krystal Biotech

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Can any of the company-specific risk be diversified away by investing in both Amtech Systems and Krystal Biotech 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 Amtech Systems and Krystal Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amtech Systems and Krystal Biotech, you can compare the effects of market volatilities on Amtech Systems and Krystal Biotech 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 Amtech Systems with a short position of Krystal Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amtech Systems and Krystal Biotech.

Diversification Opportunities for Amtech Systems and Krystal Biotech

0.65
  Correlation Coefficient

Poor diversification

The 3 months correlation between Amtech and Krystal is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Amtech Systems and Krystal Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krystal Biotech and Amtech Systems 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 Amtech Systems are associated (or correlated) with Krystal Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krystal Biotech has no effect on the direction of Amtech Systems i.e., Amtech Systems and Krystal Biotech go up and down completely randomly.

Pair Corralation between Amtech Systems and Krystal Biotech

Given the investment horizon of 90 days Amtech Systems is expected to under-perform the Krystal Biotech. In addition to that, Amtech Systems is 1.05 times more volatile than Krystal Biotech. It trades about -0.02 of its total potential returns per unit of risk. Krystal Biotech is currently generating about 0.05 per unit of volatility. If you would invest  8,021  in Krystal Biotech on October 25, 2024 and sell it today you would earn a total of  7,485  from holding Krystal Biotech or generate 93.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Amtech Systems  vs.  Krystal Biotech

 Performance 
       Timeline  
Amtech Systems 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Amtech Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
Krystal Biotech 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Krystal Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Amtech Systems and Krystal Biotech Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amtech Systems and Krystal Biotech

The main advantage of trading using opposite Amtech Systems and Krystal Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amtech Systems position performs unexpectedly, Krystal Biotech 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 Krystal Biotech will offset losses from the drop in Krystal Biotech's long position.
The idea behind Amtech Systems and Krystal Biotech 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.
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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