Correlation Between Ichor Holdings and ChipMOS Technologies
Can any of the company-specific risk be diversified away by investing in both Ichor Holdings and ChipMOS Technologies 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 ChipMOS Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ichor Holdings and ChipMOS Technologies, you can compare the effects of market volatilities on Ichor Holdings and ChipMOS Technologies 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 ChipMOS Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ichor Holdings and ChipMOS Technologies.
Diversification Opportunities for Ichor Holdings and ChipMOS Technologies
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ichor and ChipMOS is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ichor Holdings and ChipMOS Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipMOS Technologies 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 ChipMOS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChipMOS Technologies has no effect on the direction of Ichor Holdings i.e., Ichor Holdings and ChipMOS Technologies go up and down completely randomly.
Pair Corralation between Ichor Holdings and ChipMOS Technologies
Given the investment horizon of 90 days Ichor Holdings is expected to generate 1.78 times more return on investment than ChipMOS Technologies. However, Ichor Holdings is 1.78 times more volatile than ChipMOS Technologies. It trades about 0.01 of its potential returns per unit of risk. ChipMOS Technologies is currently generating about -0.02 per unit of risk. If you would invest 3,461 in Ichor Holdings on August 31, 2024 and sell it today you would lose (185.00) from holding Ichor Holdings or give up 5.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ichor Holdings vs. ChipMOS Technologies
Performance |
| Timeline |
| Ichor Holdings |
| ChipMOS Technologies |
Ichor Holdings and ChipMOS Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ichor Holdings and ChipMOS Technologies
The main advantage of trading using opposite Ichor Holdings and ChipMOS Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ichor Holdings position performs unexpectedly, ChipMOS Technologies 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 ChipMOS Technologies will offset losses from the drop in ChipMOS Technologies' long position.| Ichor Holdings vs. Cohu Inc | Ichor Holdings vs. Entegris | Ichor Holdings vs. Kulicke and Soffa | Ichor Holdings vs. Photronics |
| ChipMOS Technologies vs. Nano Labs | ChipMOS Technologies vs. Wisekey International Holding | ChipMOS Technologies vs. Silicon Motion Technology | ChipMOS Technologies vs. United Microelectronics |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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