Correlation Between Indie Semiconductor and Amtech Systems
Can any of the company-specific risk be diversified away by investing in both Indie Semiconductor 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 Indie Semiconductor and Amtech Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between indie Semiconductor and Amtech Systems, you can compare the effects of market volatilities on Indie Semiconductor 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 Indie Semiconductor with a short position of Amtech Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indie Semiconductor and Amtech Systems.
Diversification Opportunities for Indie Semiconductor and Amtech Systems
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Indie and Amtech is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding indie Semiconductor and Amtech Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtech Systems and Indie Semiconductor 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 indie Semiconductor 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 Indie Semiconductor i.e., Indie Semiconductor and Amtech Systems go up and down completely randomly.
Pair Corralation between Indie Semiconductor and Amtech Systems
Given the investment horizon of 90 days indie Semiconductor is expected to generate 7.91 times more return on investment than Amtech Systems. However, Indie Semiconductor is 7.91 times more volatile than Amtech Systems. It trades about 0.15 of its potential returns per unit of risk. Amtech Systems is currently generating about -0.06 per unit of risk. If you would invest 344.00 in indie Semiconductor on August 24, 2024 and sell it today you would earn a total of 121.00 from holding indie Semiconductor or generate 35.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
indie Semiconductor vs. Amtech Systems
Performance |
| Timeline |
| indie Semiconductor |
| Amtech Systems |
Indie Semiconductor and Amtech Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indie Semiconductor and Amtech Systems
The main advantage of trading using opposite Indie Semiconductor and Amtech Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indie Semiconductor 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.| Indie Semiconductor vs. Axcelis Technologies | Indie Semiconductor vs. inTest | Indie Semiconductor vs. Lam Research Corp | Indie Semiconductor vs. Photronics |
| Amtech Systems vs. Ultra Clean Holdings | Amtech Systems vs. Cohu Inc | Amtech Systems vs. Ichor Holdings | Amtech Systems vs. Entegris |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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