Correlation Between Lam Research and Amtech Systems
Can any of the company-specific risk be diversified away by investing in both Lam Research 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 Lam Research and Amtech Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lam Research Corp and Amtech Systems, you can compare the effects of market volatilities on Lam Research 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 Lam Research with a short position of Amtech Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lam Research and Amtech Systems.
Diversification Opportunities for Lam Research and Amtech Systems
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lam and Amtech is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lam Research Corp and Amtech Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtech Systems and Lam Research 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 Lam Research Corp 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 Lam Research i.e., Lam Research and Amtech Systems go up and down completely randomly.
Pair Corralation between Lam Research and Amtech Systems
Given the investment horizon of 90 days Lam Research Corp is expected to under-perform the Amtech Systems. But the stock apears to be less risky and, when comparing its historical volatility, Lam Research Corp is 1.14 times less risky than Amtech Systems. The stock trades about -0.05 of its potential returns per unit of risk. The Amtech Systems is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 575.00 in Amtech Systems on August 24, 2024 and sell it today you would lose (4.00) from holding Amtech Systems or give up 0.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lam Research Corp vs. Amtech Systems
Performance |
| Timeline |
| Lam Research Corp |
| Amtech Systems |
Lam Research and Amtech Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lam Research and Amtech Systems
The main advantage of trading using opposite Lam Research and Amtech Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lam Research 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.| Lam Research vs. ASML Holding NV | Lam Research vs. KLA Tencor | Lam Research vs. Axcelis Technologies | Lam Research vs. Teradyne |
| Amtech Systems vs. Ultra Clean Holdings | Amtech Systems vs. Veeco Instruments | Amtech Systems vs. Cohu Inc | Amtech Systems vs. Onto Innovation |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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