Correlation Between Amtech Systems and Tokyo Electron
Can any of the company-specific risk be diversified away by investing in both Amtech Systems and Tokyo Electron 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 Tokyo Electron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amtech Systems and Tokyo Electron, you can compare the effects of market volatilities on Amtech Systems and Tokyo Electron 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 Tokyo Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amtech Systems and Tokyo Electron.
Diversification Opportunities for Amtech Systems and Tokyo Electron
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amtech and Tokyo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Amtech Systems and Tokyo Electron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyo Electron 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 Tokyo Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyo Electron has no effect on the direction of Amtech Systems i.e., Amtech Systems and Tokyo Electron go up and down completely randomly.
Pair Corralation between Amtech Systems and Tokyo Electron
Given the investment horizon of 90 days Amtech Systems is expected to under-perform the Tokyo Electron. But the stock apears to be less risky and, when comparing its historical volatility, Amtech Systems is 2.84 times less risky than Tokyo Electron. The stock trades about -0.34 of its potential returns per unit of risk. The Tokyo Electron is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 15,114 in Tokyo Electron on November 3, 2024 and sell it today you would earn a total of 2,066 from holding Tokyo Electron or generate 13.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amtech Systems vs. Tokyo Electron
Performance |
| Timeline |
| Amtech Systems |
| Tokyo Electron |
Amtech Systems and Tokyo Electron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amtech Systems and Tokyo Electron
The main advantage of trading using opposite Amtech Systems and Tokyo Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amtech Systems position performs unexpectedly, Tokyo Electron 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 Tokyo Electron will offset losses from the drop in Tokyo Electron's long position.| Amtech Systems vs. Ultra Clean Holdings | Amtech Systems vs. Veeco Instruments | Amtech Systems vs. Cohu Inc | Amtech Systems vs. Onto Innovation |
| Tokyo Electron vs. Origin Materials | Tokyo Electron vs. Codexis | Tokyo Electron vs. The Mosaic | Tokyo Electron vs. Arrow Electronics |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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