Correlation Between AudioCodes and Tower Semiconductor
Can any of the company-specific risk be diversified away by investing in both AudioCodes and Tower Semiconductor 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 AudioCodes and Tower Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AudioCodes and Tower Semiconductor, you can compare the effects of market volatilities on AudioCodes and Tower Semiconductor 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 AudioCodes with a short position of Tower Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of AudioCodes and Tower Semiconductor.
Diversification Opportunities for AudioCodes and Tower Semiconductor
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AudioCodes and Tower is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding AudioCodes and Tower Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower Semiconductor and AudioCodes 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 AudioCodes are associated (or correlated) with Tower Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower Semiconductor has no effect on the direction of AudioCodes i.e., AudioCodes and Tower Semiconductor go up and down completely randomly.
Pair Corralation between AudioCodes and Tower Semiconductor
Assuming the 90 days trading horizon AudioCodes is expected to under-perform the Tower Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, AudioCodes is 1.01 times less risky than Tower Semiconductor. The stock trades about -0.05 of its potential returns per unit of risk. The Tower Semiconductor is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,690,000 in Tower Semiconductor on August 29, 2024 and sell it today you would earn a total of 70,000 from holding Tower Semiconductor or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AudioCodes vs. Tower Semiconductor
Performance |
| Timeline |
| AudioCodes |
| Tower Semiconductor |
AudioCodes and Tower Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AudioCodes and Tower Semiconductor
The main advantage of trading using opposite AudioCodes and Tower Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AudioCodes position performs unexpectedly, Tower Semiconductor 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 Tower Semiconductor will offset losses from the drop in Tower Semiconductor's long position.| AudioCodes vs. Nice | AudioCodes vs. Tower Semiconductor | AudioCodes vs. Elbit Systems | AudioCodes vs. Nova |
| Tower Semiconductor vs. Teva Pharmaceutical Industries | Tower Semiconductor vs. Elbit Systems | Tower Semiconductor vs. Nice | Tower Semiconductor vs. Bezeq Israeli Telecommunication |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |