Correlation Between Lasertec and Cohu
Can any of the company-specific risk be diversified away by investing in both Lasertec and Cohu 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 Lasertec and Cohu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lasertec and Cohu Inc, you can compare the effects of market volatilities on Lasertec and Cohu 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 Lasertec with a short position of Cohu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lasertec and Cohu.
Diversification Opportunities for Lasertec and Cohu
Very good diversification
The 3 months correlation between Lasertec and Cohu is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Lasertec and Cohu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohu Inc and Lasertec 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 Lasertec are associated (or correlated) with Cohu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohu Inc has no effect on the direction of Lasertec i.e., Lasertec and Cohu go up and down completely randomly.
Pair Corralation between Lasertec and Cohu
Assuming the 90 days horizon Lasertec is expected to under-perform the Cohu. But the pink sheet apears to be less risky and, when comparing its historical volatility, Lasertec is 1.07 times less risky than Cohu. The pink sheet trades about -0.41 of its potential returns per unit of risk. The Cohu Inc is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,647 in Cohu Inc on August 28, 2024 and sell it today you would lose (62.00) from holding Cohu Inc or give up 2.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lasertec vs. Cohu Inc
Performance |
| Timeline |
| Lasertec |
| Cohu Inc |
Lasertec and Cohu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lasertec and Cohu
The main advantage of trading using opposite Lasertec and Cohu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lasertec position performs unexpectedly, Cohu 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 Cohu will offset losses from the drop in Cohu's long position.| Lasertec vs. Sumco Corp ADR | Lasertec vs. Asm Pacific Technology | Lasertec vs. Tokyo Electron | Lasertec vs. Advantest |
| Cohu vs. Onto Innovation | Cohu vs. Photronics | Cohu vs. Ultra Clean Holdings | Cohu vs. Axcelis Technologies |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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