Correlation Between East West and Amtech Systems
Can any of the company-specific risk be diversified away by investing in both East West 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 East West and Amtech Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East West Bancorp and Amtech Systems, you can compare the effects of market volatilities on East West 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 East West with a short position of Amtech Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of East West and Amtech Systems.
Diversification Opportunities for East West and Amtech Systems
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between East and Amtech is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding East West Bancorp and Amtech Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtech Systems and East West 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 East West Bancorp 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 East West i.e., East West and Amtech Systems go up and down completely randomly.
Pair Corralation between East West and Amtech Systems
Given the investment horizon of 90 days East West Bancorp is expected to generate 0.65 times more return on investment than Amtech Systems. However, East West Bancorp is 1.54 times less risky than Amtech Systems. It trades about 0.06 of its potential returns per unit of risk. Amtech Systems is currently generating about 0.0 per unit of risk. If you would invest 6,188 in East West Bancorp on August 30, 2024 and sell it today you would earn a total of 4,817 from holding East West Bancorp or generate 77.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
East West Bancorp vs. Amtech Systems
Performance |
| Timeline |
| East West Bancorp |
| Amtech Systems |
East West and Amtech Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East West and Amtech Systems
The main advantage of trading using opposite East West and Amtech Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East West 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.| East West vs. Barclays PLC ADR | East West vs. UBS Group AG | East West vs. ING Group NV | East West vs. Citigroup |
| Amtech Systems vs. Ultra Clean Holdings | Amtech Systems vs. Veeco Instruments | Amtech Systems vs. Cohu Inc | Amtech Systems vs. Onto Innovation |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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