Correlation Between Amtech Systems and Sumco Corp
Can any of the company-specific risk be diversified away by investing in both Amtech Systems and Sumco Corp 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 Sumco Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amtech Systems and Sumco Corp ADR, you can compare the effects of market volatilities on Amtech Systems and Sumco Corp 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 Sumco Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amtech Systems and Sumco Corp.
Diversification Opportunities for Amtech Systems and Sumco Corp
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amtech and Sumco is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Amtech Systems and Sumco Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumco Corp ADR 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 Sumco Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumco Corp ADR has no effect on the direction of Amtech Systems i.e., Amtech Systems and Sumco Corp go up and down completely randomly.
Pair Corralation between Amtech Systems and Sumco Corp
Given the investment horizon of 90 days Amtech Systems is expected to generate 0.76 times more return on investment than Sumco Corp. However, Amtech Systems is 1.32 times less risky than Sumco Corp. It trades about -0.06 of its potential returns per unit of risk. Sumco Corp ADR is currently generating about -0.32 per unit of risk. If you would invest 596.00 in Amtech Systems on August 24, 2024 and sell it today you would lose (15.00) from holding Amtech Systems or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Amtech Systems vs. Sumco Corp ADR
Performance |
| Timeline |
| Amtech Systems |
| Sumco Corp ADR |
Amtech Systems and Sumco Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amtech Systems and Sumco Corp
The main advantage of trading using opposite Amtech Systems and Sumco Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amtech Systems position performs unexpectedly, Sumco Corp 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 Sumco Corp will offset losses from the drop in Sumco Corp's long position.| Amtech Systems vs. Ultra Clean Holdings | Amtech Systems vs. Cohu Inc | Amtech Systems vs. Ichor Holdings | Amtech Systems vs. Entegris |
| Sumco Corp vs. Lasertec | Sumco Corp vs. Asm Pacific Technology | Sumco Corp vs. Disco Corp ADR | Sumco Corp vs. Tokyo Electron |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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