Correlation Between F5 Networks and Ichor Holdings
Can any of the company-specific risk be diversified away by investing in both F5 Networks and Ichor Holdings 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 F5 Networks and Ichor Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between F5 Networks and Ichor Holdings, you can compare the effects of market volatilities on F5 Networks and Ichor Holdings 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 F5 Networks with a short position of Ichor Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of F5 Networks and Ichor Holdings.
Diversification Opportunities for F5 Networks and Ichor Holdings
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FFIV and Ichor is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding F5 Networks and Ichor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Holdings and F5 Networks 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 F5 Networks are associated (or correlated) with Ichor Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichor Holdings has no effect on the direction of F5 Networks i.e., F5 Networks and Ichor Holdings go up and down completely randomly.
Pair Corralation between F5 Networks and Ichor Holdings
Given the investment horizon of 90 days F5 Networks is expected to generate 0.51 times more return on investment than Ichor Holdings. However, F5 Networks is 1.98 times less risky than Ichor Holdings. It trades about 0.07 of its potential returns per unit of risk. Ichor Holdings is currently generating about 0.02 per unit of risk. If you would invest 14,926 in F5 Networks on August 27, 2024 and sell it today you would earn a total of 9,772 from holding F5 Networks or generate 65.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
F5 Networks vs. Ichor Holdings
Performance |
| Timeline |
| F5 Networks |
| Ichor Holdings |
F5 Networks and Ichor Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with F5 Networks and Ichor Holdings
The main advantage of trading using opposite F5 Networks and Ichor Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if F5 Networks position performs unexpectedly, Ichor Holdings 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 Ichor Holdings will offset losses from the drop in Ichor Holdings' long position.| F5 Networks vs. Ichor Holdings | F5 Networks vs. Fabrinet | F5 Networks vs. Hello Group | F5 Networks vs. Ultra Clean Holdings |
| Ichor Holdings vs. Cohu Inc | Ichor Holdings vs. Entegris | Ichor Holdings vs. Kulicke and Soffa | Ichor Holdings vs. Photronics |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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