Correlation Between Nextage Therapeutics and Tower Semiconductor
Can any of the company-specific risk be diversified away by investing in both Nextage Therapeutics and Tower Semiconductor 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 Nextage Therapeutics and Tower Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextage Therapeutics and Tower Semiconductor, you can compare the effects of market volatilities on Nextage Therapeutics and Tower Semiconductor 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 Nextage Therapeutics with a short position of Tower Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextage Therapeutics and Tower Semiconductor.
Diversification Opportunities for Nextage Therapeutics and Tower Semiconductor
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nextage and Tower is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nextage Therapeutics and Tower Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower Semiconductor and Nextage Therapeutics 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 Nextage Therapeutics are associated (or correlated) with Tower Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower Semiconductor has no effect on the direction of Nextage Therapeutics i.e., Nextage Therapeutics and Tower Semiconductor go up and down completely randomly.
Pair Corralation between Nextage Therapeutics and Tower Semiconductor
Assuming the 90 days trading horizon Nextage Therapeutics is expected to generate 3.71 times less return on investment than Tower Semiconductor. In addition to that, Nextage Therapeutics is 2.37 times more volatile than Tower Semiconductor. It trades about 0.01 of its total potential returns per unit of risk. Tower Semiconductor is currently generating about 0.1 per unit of volatility. If you would invest 1,372,000 in Tower Semiconductor on September 3, 2024 and sell it today you would earn a total of 313,000 from holding Tower Semiconductor or generate 22.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextage Therapeutics vs. Tower Semiconductor
Performance |
| Timeline |
| Nextage Therapeutics |
| Tower Semiconductor |
Nextage Therapeutics and Tower Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextage Therapeutics and Tower Semiconductor
The main advantage of trading using opposite Nextage Therapeutics and Tower Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextage Therapeutics position performs unexpectedly, Tower Semiconductor 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 Tower Semiconductor will offset losses from the drop in Tower Semiconductor's long position.| Nextage Therapeutics vs. B Communications | Nextage Therapeutics vs. ICL Israel Chemicals | Nextage Therapeutics vs. Tower Semiconductor | Nextage Therapeutics vs. Amir Marketing and |
| Tower Semiconductor vs. Teva Pharmaceutical Industries | Tower Semiconductor vs. Elbit Systems | Tower Semiconductor vs. Nice | Tower Semiconductor vs. Bezeq Israeli Telecommunication |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |