Correlation Between Ichor Holdings and Nova
Can any of the company-specific risk be diversified away by investing in both Ichor Holdings and Nova 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 Nova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ichor Holdings and Nova, you can compare the effects of market volatilities on Ichor Holdings and Nova 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 Nova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ichor Holdings and Nova.
Diversification Opportunities for Ichor Holdings and Nova
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ichor and Nova is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ichor Holdings and Nova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova 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 Nova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova has no effect on the direction of Ichor Holdings i.e., Ichor Holdings and Nova go up and down completely randomly.
Pair Corralation between Ichor Holdings and Nova
Given the investment horizon of 90 days Ichor Holdings is expected to generate 1.1 times more return on investment than Nova. However, Ichor Holdings is 1.1 times more volatile than Nova. It trades about 0.26 of its potential returns per unit of risk. Nova is currently generating about -0.07 per unit of risk. If you would invest 2,785 in Ichor Holdings on August 28, 2024 and sell it today you would earn a total of 652.00 from holding Ichor Holdings or generate 23.41% 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. Nova
Performance |
| Timeline |
| Ichor Holdings |
| Nova |
Ichor Holdings and Nova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ichor Holdings and Nova
The main advantage of trading using opposite Ichor Holdings and Nova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ichor Holdings position performs unexpectedly, Nova 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 Nova will offset losses from the drop in Nova's long position.| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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