Correlation Between Cohu and Tokyo Electron
Can any of the company-specific risk be diversified away by investing in both Cohu and Tokyo Electron 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 Tokyo Electron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohu Inc and Tokyo Electron Ltd, you can compare the effects of market volatilities on Cohu and Tokyo Electron 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 Tokyo Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohu and Tokyo Electron.
Diversification Opportunities for Cohu and Tokyo Electron
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cohu and Tokyo is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cohu Inc and Tokyo Electron Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyo Electron 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 Tokyo Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyo Electron has no effect on the direction of Cohu i.e., Cohu and Tokyo Electron go up and down completely randomly.
Pair Corralation between Cohu and Tokyo Electron
Given the investment horizon of 90 days Cohu Inc is expected to generate 1.32 times more return on investment than Tokyo Electron. However, Cohu is 1.32 times more volatile than Tokyo Electron Ltd. It trades about -0.02 of its potential returns per unit of risk. Tokyo Electron Ltd is currently generating about -0.1 per unit of risk. If you would invest 2,647 in Cohu Inc on August 28, 2024 and sell it today you would lose (62.00) from holding Cohu Inc or give up 2.34% 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. Tokyo Electron Ltd
Performance |
| Timeline |
| Cohu Inc |
| Tokyo Electron |
Cohu and Tokyo Electron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohu and Tokyo Electron
The main advantage of trading using opposite Cohu and Tokyo Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohu position performs unexpectedly, Tokyo Electron 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 Tokyo Electron will offset losses from the drop in Tokyo Electron's long position.| Cohu vs. Onto Innovation | Cohu vs. Photronics | Cohu vs. Ultra Clean Holdings | Cohu vs. Axcelis Technologies |
| Tokyo Electron vs. Advantest | Tokyo Electron vs. Disco Corp ADR | Tokyo Electron vs. Teradyne | Tokyo Electron vs. Lasertec |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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