Correlation Between Tokyo Electron and Cohu
Can any of the company-specific risk be diversified away by investing in both Tokyo Electron 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 Tokyo Electron and Cohu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tokyo Electron and Cohu Inc, you can compare the effects of market volatilities on Tokyo Electron 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 Tokyo Electron with a short position of Cohu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokyo Electron and Cohu.
Diversification Opportunities for Tokyo Electron and Cohu
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tokyo and Cohu is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Tokyo Electron and Cohu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohu Inc and Tokyo Electron 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 Tokyo Electron 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 Tokyo Electron i.e., Tokyo Electron and Cohu go up and down completely randomly.
Pair Corralation between Tokyo Electron and Cohu
Assuming the 90 days horizon Tokyo Electron is expected to under-perform the Cohu. In addition to that, Tokyo Electron is 1.06 times more volatile than Cohu Inc. It trades about -0.03 of its total potential returns per unit of risk. Cohu Inc is currently generating about -0.02 per unit of volatility. 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 |
Tokyo Electron vs. Cohu Inc
Performance |
| Timeline |
| Tokyo Electron |
| Cohu Inc |
Tokyo Electron and Cohu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tokyo Electron and Cohu
The main advantage of trading using opposite Tokyo Electron and Cohu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokyo Electron 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.| Tokyo Electron vs. ASML Holding NV | Tokyo Electron vs. Applied Materials | Tokyo Electron vs. Lam Research Corp | Tokyo Electron vs. KLA Tencor |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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