Correlation Between Cohu and AXT
Can any of the company-specific risk be diversified away by investing in both Cohu and AXT 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 Cohu and AXT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohu Inc and AXT Inc, you can compare the effects of market volatilities on Cohu and AXT 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 Cohu with a short position of AXT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohu and AXT.
Diversification Opportunities for Cohu and AXT
Pay attention - limited upside
The 3 months correlation between Cohu and AXT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cohu Inc and AXT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXT Inc and Cohu 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 Cohu Inc are associated (or correlated) with AXT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXT Inc has no effect on the direction of Cohu i.e., Cohu and AXT go up and down completely randomly.
Pair Corralation between Cohu and AXT
Given the investment horizon of 90 days Cohu Inc is expected to under-perform the AXT. But the stock apears to be less risky and, when comparing its historical volatility, Cohu Inc is 1.71 times less risky than AXT. The stock trades about -0.33 of its potential returns per unit of risk. The AXT Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 217.00 in AXT Inc on November 1, 2024 and sell it today you would lose (9.00) from holding AXT Inc or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cohu Inc vs. AXT Inc
Performance |
| Timeline |
| Cohu Inc |
| AXT Inc |
Cohu and AXT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohu and AXT
The main advantage of trading using opposite Cohu and AXT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohu position performs unexpectedly, AXT 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 AXT will offset losses from the drop in AXT's long position.| Cohu vs. Diodes Incorporated | Cohu vs. Daqo New Energy | Cohu vs. Micron Technology | Cohu vs. MagnaChip Semiconductor |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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