Correlation Between SolarEdge Technologies and Ichor Holdings
Can any of the company-specific risk be diversified away by investing in both SolarEdge Technologies 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 SolarEdge Technologies and Ichor Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SolarEdge Technologies and Ichor Holdings, you can compare the effects of market volatilities on SolarEdge Technologies 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 SolarEdge Technologies with a short position of Ichor Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SolarEdge Technologies and Ichor Holdings.
Diversification Opportunities for SolarEdge Technologies and Ichor Holdings
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SolarEdge and Ichor is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding SolarEdge Technologies and Ichor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Holdings and SolarEdge Technologies 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 SolarEdge Technologies 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 SolarEdge Technologies i.e., SolarEdge Technologies and Ichor Holdings go up and down completely randomly.
Pair Corralation between SolarEdge Technologies and Ichor Holdings
Given the investment horizon of 90 days SolarEdge Technologies is expected to under-perform the Ichor Holdings. In addition to that, SolarEdge Technologies is 1.69 times more volatile than Ichor Holdings. It trades about -0.13 of its total potential returns per unit of risk. Ichor Holdings is currently generating about 0.01 per unit of volatility. If you would invest 3,593 in Ichor Holdings on September 2, 2024 and sell it today you would lose (317.00) from holding Ichor Holdings or give up 8.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SolarEdge Technologies vs. Ichor Holdings
Performance |
| Timeline |
| SolarEdge Technologies |
| Ichor Holdings |
SolarEdge Technologies and Ichor Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SolarEdge Technologies and Ichor Holdings
The main advantage of trading using opposite SolarEdge Technologies and Ichor Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SolarEdge Technologies 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.| SolarEdge Technologies vs. First Solar | SolarEdge Technologies vs. Sunrun Inc | SolarEdge Technologies vs. Canadian Solar | SolarEdge Technologies vs. Enphase Energy |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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