Correlation Between Lam Research and Rubicon Technology
Can any of the company-specific risk be diversified away by investing in both Lam Research and Rubicon Technology 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 Rubicon Technology 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 Rubicon Technology, you can compare the effects of market volatilities on Lam Research and Rubicon Technology 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 Rubicon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lam Research and Rubicon Technology.
Diversification Opportunities for Lam Research and Rubicon Technology
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lam and Rubicon is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Lam Research Corp and Rubicon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubicon Technology 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 Rubicon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubicon Technology has no effect on the direction of Lam Research i.e., Lam Research and Rubicon Technology go up and down completely randomly.
Pair Corralation between Lam Research and Rubicon Technology
Given the investment horizon of 90 days Lam Research Corp is expected to generate 0.31 times more return on investment than Rubicon Technology. However, Lam Research Corp is 3.26 times less risky than Rubicon Technology. It trades about 0.06 of its potential returns per unit of risk. Rubicon Technology is currently generating about -0.03 per unit of risk. If you would invest 4,342 in Lam Research Corp on August 28, 2024 and sell it today you would earn a total of 3,029 from holding Lam Research Corp or generate 69.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.89% |
| Values | Daily Returns |
Lam Research Corp vs. Rubicon Technology
Performance |
| Timeline |
| Lam Research Corp |
| Rubicon Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lam Research and Rubicon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lam Research and Rubicon Technology
The main advantage of trading using opposite Lam Research and Rubicon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lam Research position performs unexpectedly, Rubicon Technology 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 Rubicon Technology will offset losses from the drop in Rubicon Technology's long position.| Lam Research vs. ASML Holding NV | Lam Research vs. KLA Tencor | Lam Research vs. Axcelis Technologies | Lam Research vs. Teradyne |
| Rubicon Technology vs. Axcelis Technologies | Rubicon Technology vs. inTest | Rubicon Technology vs. Lam Research Corp | Rubicon Technology 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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