Correlation Between Clearfield and Ichor Holdings
Can any of the company-specific risk be diversified away by investing in both Clearfield 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 Clearfield and Ichor Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearfield and Ichor Holdings, you can compare the effects of market volatilities on Clearfield 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 Clearfield with a short position of Ichor Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearfield and Ichor Holdings.
Diversification Opportunities for Clearfield and Ichor Holdings
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clearfield and Ichor is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Clearfield and Ichor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Holdings and Clearfield 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 Clearfield 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 Clearfield i.e., Clearfield and Ichor Holdings go up and down completely randomly.
Pair Corralation between Clearfield and Ichor Holdings
Given the investment horizon of 90 days Clearfield is expected to under-perform the Ichor Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Clearfield is 1.46 times less risky than Ichor Holdings. The stock trades about -0.1 of its potential returns per unit of risk. The Ichor Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,872 in Ichor Holdings on August 31, 2024 and sell it today you would earn a total of 344.00 from holding Ichor Holdings or generate 11.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearfield vs. Ichor Holdings
Performance |
| Timeline |
| Clearfield |
| Ichor Holdings |
Clearfield and Ichor Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearfield and Ichor Holdings
The main advantage of trading using opposite Clearfield and Ichor Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearfield 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.| Clearfield vs. Comtech Telecommunications Corp | Clearfield vs. Knowles Cor | Clearfield vs. Extreme Networks | Clearfield vs. KVH Industries |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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