Correlation Between Canaan and Ichor Holdings
Can any of the company-specific risk be diversified away by investing in both Canaan and Ichor Holdings 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 Canaan and Ichor Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaan Inc and Ichor Holdings, you can compare the effects of market volatilities on Canaan and Ichor Holdings 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 Canaan with a short position of Ichor Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaan and Ichor Holdings.
Diversification Opportunities for Canaan and Ichor Holdings
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canaan and Ichor is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Canaan Inc and Ichor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Holdings and Canaan 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 Canaan Inc are associated (or correlated) with Ichor Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichor Holdings has no effect on the direction of Canaan i.e., Canaan and Ichor Holdings go up and down completely randomly.
Pair Corralation between Canaan and Ichor Holdings
Considering the 90-day investment horizon Canaan Inc is expected to generate 2.77 times more return on investment than Ichor Holdings. However, Canaan is 2.77 times more volatile than Ichor Holdings. It trades about 0.16 of its potential returns per unit of risk. Ichor Holdings is currently generating about 0.15 per unit of risk. If you would invest 136.00 in Canaan Inc on August 31, 2024 and sell it today you would earn a total of 46.00 from holding Canaan Inc or generate 33.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canaan Inc vs. Ichor Holdings
Performance |
| Timeline |
| Canaan Inc |
| Ichor Holdings |
Canaan and Ichor Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaan and Ichor Holdings
The main advantage of trading using opposite Canaan and Ichor Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaan position performs unexpectedly, Ichor Holdings 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 Ichor Holdings will offset losses from the drop in Ichor Holdings' long position.| Canaan vs. 3D Systems | Canaan vs. NetApp Inc | Canaan vs. Rigetti Computing | Canaan vs. Logitech International SA |
| Ichor Holdings vs. Cohu Inc | Ichor Holdings vs. Entegris | Ichor Holdings vs. Kulicke and Soffa | Ichor Holdings vs. Photronics |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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