Correlation Between Ichor Holdings and Cisco Systems
Can any of the company-specific risk be diversified away by investing in both Ichor Holdings and Cisco 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 Ichor Holdings and Cisco Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ichor Holdings and Cisco Systems, you can compare the effects of market volatilities on Ichor Holdings and Cisco 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 Ichor Holdings with a short position of Cisco Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ichor Holdings and Cisco Systems.
Diversification Opportunities for Ichor Holdings and Cisco Systems
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ichor and Cisco is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ichor Holdings and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems and Ichor Holdings 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 Ichor Holdings are associated (or correlated) with Cisco Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cisco Systems has no effect on the direction of Ichor Holdings i.e., Ichor Holdings and Cisco Systems go up and down completely randomly.
Pair Corralation between Ichor Holdings and Cisco Systems
Given the investment horizon of 90 days Ichor Holdings is expected to generate 3.74 times more return on investment than Cisco Systems. However, Ichor Holdings is 3.74 times more volatile than Cisco Systems. It trades about 0.25 of its potential returns per unit of risk. Cisco Systems is currently generating about 0.19 per unit of risk. If you would invest 2,699 in Ichor Holdings on August 25, 2024 and sell it today you would earn a total of 636.00 from holding Ichor Holdings or generate 23.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ichor Holdings vs. Cisco Systems
Performance |
| Timeline |
| Ichor Holdings |
| Cisco Systems |
Ichor Holdings and Cisco Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ichor Holdings and Cisco Systems
The main advantage of trading using opposite Ichor Holdings and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ichor Holdings position performs unexpectedly, Cisco 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 Cisco Systems will offset losses from the drop in Cisco Systems' long position.| Ichor Holdings vs. Teradyne | Ichor Holdings vs. Amtech Systems | Ichor Holdings vs. Veeco Instruments | Ichor Holdings vs. IPG Photonics |
| Cisco Systems vs. Lumentum Holdings | Cisco Systems vs. Ichor Holdings | Cisco Systems vs. Fabrinet | Cisco Systems vs. Hello Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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