Correlation Between Bank Central and Ichor Holdings
Can any of the company-specific risk be diversified away by investing in both Bank Central and Ichor Holdings 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 Bank Central and Ichor Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and Ichor Holdings, you can compare the effects of market volatilities on Bank Central and Ichor Holdings 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 Bank Central with a short position of Ichor Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Ichor Holdings.
Diversification Opportunities for Bank Central and Ichor Holdings
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Ichor is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Ichor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Holdings and Bank Central 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 Bank Central Asia are associated (or correlated) with Ichor Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichor Holdings has no effect on the direction of Bank Central i.e., Bank Central and Ichor Holdings go up and down completely randomly.
Pair Corralation between Bank Central and Ichor Holdings
Assuming the 90 days horizon Bank Central Asia is expected to under-perform the Ichor Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Central Asia is 3.28 times less risky than Ichor Holdings. The pink sheet trades about -0.29 of its potential returns per unit of risk. The Ichor Holdings is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,785 in Ichor Holdings on August 28, 2024 and sell it today you would earn a total of 652.00 from holding Ichor Holdings or generate 23.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Central Asia vs. Ichor Holdings
Performance |
| Timeline |
| Bank Central Asia |
| Ichor Holdings |
Bank Central and Ichor Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Ichor Holdings
The main advantage of trading using opposite Bank Central and Ichor Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Ichor Holdings 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 Ichor Holdings will offset losses from the drop in Ichor Holdings' long position.The idea behind Bank Central Asia and Ichor Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ichor Holdings vs. Cohu Inc | Ichor Holdings vs. Entegris | Ichor Holdings vs. Kulicke and Soffa | Ichor Holdings 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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