Correlation Between Tokyo Electron and Ichor Holdings
Can any of the company-specific risk be diversified away by investing in both Tokyo Electron 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 Tokyo Electron and Ichor Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tokyo Electron and Ichor Holdings, you can compare the effects of market volatilities on Tokyo Electron 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 Tokyo Electron with a short position of Ichor Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokyo Electron and Ichor Holdings.
Diversification Opportunities for Tokyo Electron and Ichor Holdings
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tokyo and Ichor is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Tokyo Electron and Ichor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Holdings 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 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 Tokyo Electron i.e., Tokyo Electron and Ichor Holdings go up and down completely randomly.
Pair Corralation between Tokyo Electron and Ichor Holdings
Assuming the 90 days horizon Tokyo Electron is expected to generate 0.52 times more return on investment than Ichor Holdings. However, Tokyo Electron is 1.94 times less risky than Ichor Holdings. It trades about -0.06 of its potential returns per unit of risk. Ichor Holdings is currently generating about -0.22 per unit of risk. If you would invest 14,353 in Tokyo Electron on January 14, 2025 and sell it today you would lose (1,012) from holding Tokyo Electron or give up 7.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tokyo Electron vs. Ichor Holdings
Performance |
| Timeline |
| Tokyo Electron |
| Ichor Holdings |
Tokyo Electron and Ichor Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tokyo Electron and Ichor Holdings
The main advantage of trading using opposite Tokyo Electron and Ichor Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokyo Electron 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.| Tokyo Electron vs. Magna International | Tokyo Electron vs. Seadrill Limited | Tokyo Electron vs. Tenaris SA ADR | Tokyo Electron vs. Wabash National |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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