Correlation Between Tower Semiconductor and Accel Solutions
Can any of the company-specific risk be diversified away by investing in both Tower Semiconductor and Accel Solutions 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 Tower Semiconductor and Accel Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tower Semiconductor and Accel Solutions Group, you can compare the effects of market volatilities on Tower Semiconductor and Accel Solutions 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 Tower Semiconductor with a short position of Accel Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tower Semiconductor and Accel Solutions.
Diversification Opportunities for Tower Semiconductor and Accel Solutions
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tower and Accel is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Tower Semiconductor and Accel Solutions Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accel Solutions Group and Tower Semiconductor 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 Tower Semiconductor are associated (or correlated) with Accel Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accel Solutions Group has no effect on the direction of Tower Semiconductor i.e., Tower Semiconductor and Accel Solutions go up and down completely randomly.
Pair Corralation between Tower Semiconductor and Accel Solutions
Assuming the 90 days trading horizon Tower Semiconductor is expected to generate 1.21 times more return on investment than Accel Solutions. However, Tower Semiconductor is 1.21 times more volatile than Accel Solutions Group. It trades about 0.13 of its potential returns per unit of risk. Accel Solutions Group is currently generating about -0.08 per unit of risk. If you would invest 1,571,000 in Tower Semiconductor on September 1, 2024 and sell it today you would earn a total of 114,000 from holding Tower Semiconductor or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tower Semiconductor vs. Accel Solutions Group
Performance |
| Timeline |
| Tower Semiconductor |
| Accel Solutions Group |
Tower Semiconductor and Accel Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tower Semiconductor and Accel Solutions
The main advantage of trading using opposite Tower Semiconductor and Accel Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower Semiconductor position performs unexpectedly, Accel Solutions 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 Accel Solutions will offset losses from the drop in Accel Solutions' long position.| Tower Semiconductor vs. Palram | Tower Semiconductor vs. Shagrir Group Vehicle | Tower Semiconductor vs. EN Shoham Business | Tower Semiconductor vs. Shufersal |
| Accel Solutions vs. Isras Investment | Accel Solutions vs. Analyst IMS Investment | Accel Solutions vs. Discount Investment Corp | Accel Solutions vs. Veridis Environment |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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