Correlation Between Photronics and Camtek
Can any of the company-specific risk be diversified away by investing in both Photronics and Camtek 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 Photronics and Camtek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photronics and Camtek, you can compare the effects of market volatilities on Photronics and Camtek 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 Photronics with a short position of Camtek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photronics and Camtek.
Diversification Opportunities for Photronics and Camtek
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Photronics and Camtek is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Photronics and Camtek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camtek and Photronics 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 Photronics are associated (or correlated) with Camtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camtek has no effect on the direction of Photronics i.e., Photronics and Camtek go up and down completely randomly.
Pair Corralation between Photronics and Camtek
Given the investment horizon of 90 days Photronics is expected to generate 0.62 times more return on investment than Camtek. However, Photronics is 1.61 times less risky than Camtek. It trades about 0.13 of its potential returns per unit of risk. Camtek is currently generating about -0.1 per unit of risk. If you would invest 2,392 in Photronics on August 28, 2024 and sell it today you would earn a total of 151.00 from holding Photronics or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Photronics vs. Camtek
Performance |
| Timeline |
| Photronics |
| Camtek |
Photronics and Camtek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Photronics and Camtek
The main advantage of trading using opposite Photronics and Camtek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photronics position performs unexpectedly, Camtek 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 Camtek will offset losses from the drop in Camtek's long position.The idea behind Photronics and Camtek 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.| Camtek vs. Onto Innovation | Camtek vs. Amtech Systems | Camtek vs. Veeco Instruments | Camtek vs. Ichor Holdings |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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