Correlation Between Cohu and Sumco Corp
Can any of the company-specific risk be diversified away by investing in both Cohu and Sumco Corp 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 Sumco Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohu Inc and Sumco Corp ADR, you can compare the effects of market volatilities on Cohu and Sumco Corp 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 Sumco Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohu and Sumco Corp.
Diversification Opportunities for Cohu and Sumco Corp
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cohu and Sumco is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cohu Inc and Sumco Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumco Corp ADR 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 Sumco Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumco Corp ADR has no effect on the direction of Cohu i.e., Cohu and Sumco Corp go up and down completely randomly.
Pair Corralation between Cohu and Sumco Corp
Given the investment horizon of 90 days Cohu Inc is expected to generate 0.86 times more return on investment than Sumco Corp. However, Cohu Inc is 1.17 times less risky than Sumco Corp. It trades about -0.01 of its potential returns per unit of risk. Sumco Corp ADR is currently generating about -0.03 per unit of risk. If you would invest 3,539 in Cohu Inc on September 2, 2024 and sell it today you would lose (899.00) from holding Cohu Inc or give up 25.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cohu Inc vs. Sumco Corp ADR
Performance |
| Timeline |
| Cohu Inc |
| Sumco Corp ADR |
Cohu and Sumco Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohu and Sumco Corp
The main advantage of trading using opposite Cohu and Sumco Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohu position performs unexpectedly, Sumco Corp 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 Sumco Corp will offset losses from the drop in Sumco Corp's long position.| Cohu vs. NXP Semiconductors NV | Cohu vs. GSI Technology | Cohu vs. MaxLinear | Cohu vs. Texas Instruments Incorporated |
| Sumco Corp vs. Ultra Clean Holdings | Sumco Corp vs. Amtech Systems | Sumco Corp vs. Veeco Instruments | Sumco Corp vs. Cohu Inc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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