Correlation Between Disco Corp and Cohu
Can any of the company-specific risk be diversified away by investing in both Disco Corp and Cohu 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 Disco Corp and Cohu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Disco Corp ADR and Cohu Inc, you can compare the effects of market volatilities on Disco Corp and Cohu 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 Disco Corp with a short position of Cohu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disco Corp and Cohu.
Diversification Opportunities for Disco Corp and Cohu
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Disco and Cohu is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Disco Corp ADR and Cohu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohu Inc and Disco Corp 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 Disco Corp ADR are associated (or correlated) with Cohu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohu Inc has no effect on the direction of Disco Corp i.e., Disco Corp and Cohu go up and down completely randomly.
Pair Corralation between Disco Corp and Cohu
Assuming the 90 days horizon Disco Corp ADR is expected to generate 1.84 times more return on investment than Cohu. However, Disco Corp is 1.84 times more volatile than Cohu Inc. It trades about 0.14 of its potential returns per unit of risk. Cohu Inc is currently generating about -0.33 per unit of risk. If you would invest 2,657 in Disco Corp ADR on November 1, 2024 and sell it today you would earn a total of 292.00 from holding Disco Corp ADR or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Disco Corp ADR vs. Cohu Inc
Performance |
| Timeline |
| Disco Corp ADR |
| Cohu Inc |
Disco Corp and Cohu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disco Corp and Cohu
The main advantage of trading using opposite Disco Corp and Cohu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disco Corp position performs unexpectedly, Cohu 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 Cohu will offset losses from the drop in Cohu's long position.| Disco Corp vs. Asm Pacific Technology | Disco Corp vs. Tokyo Electron | Disco Corp vs. Lasertec | Disco Corp vs. Sumco Corp ADR |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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