Correlation Between Daqo New and Amtech Systems
Can any of the company-specific risk be diversified away by investing in both Daqo New and Amtech Systems 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 Daqo New and Amtech Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daqo New Energy and Amtech Systems, you can compare the effects of market volatilities on Daqo New and Amtech Systems 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 Daqo New with a short position of Amtech Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daqo New and Amtech Systems.
Diversification Opportunities for Daqo New and Amtech Systems
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Daqo and Amtech is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Daqo New Energy and Amtech Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtech Systems and Daqo New 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 Daqo New Energy are associated (or correlated) with Amtech Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtech Systems has no effect on the direction of Daqo New i.e., Daqo New and Amtech Systems go up and down completely randomly.
Pair Corralation between Daqo New and Amtech Systems
Allowing for the 90-day total investment horizon Daqo New Energy is expected to under-perform the Amtech Systems. In addition to that, Daqo New is 1.14 times more volatile than Amtech Systems. It trades about -0.02 of its total potential returns per unit of risk. Amtech Systems is currently generating about -0.02 per unit of volatility. If you would invest 978.00 in Amtech Systems on November 1, 2024 and sell it today you would lose (468.00) from holding Amtech Systems or give up 47.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Daqo New Energy vs. Amtech Systems
Performance |
| Timeline |
| Daqo New Energy |
| Amtech Systems |
Daqo New and Amtech Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daqo New and Amtech Systems
The main advantage of trading using opposite Daqo New and Amtech Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daqo New position performs unexpectedly, Amtech Systems 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 Amtech Systems will offset losses from the drop in Amtech Systems' long position.| Daqo New vs. Axcelis Technologies | Daqo New vs. Kulicke and Soffa | Daqo New vs. Ultra Clean Holdings | Daqo New vs. Cohu Inc |
| Amtech Systems vs. Diodes Incorporated | Amtech Systems vs. Daqo New Energy | Amtech Systems vs. Micron Technology | Amtech Systems 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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