Correlation Between Tower Semiconductor and Camtek
Can any of the company-specific risk be diversified away by investing in both Tower Semiconductor 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 Tower Semiconductor and Camtek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tower Semiconductor and Camtek, you can compare the effects of market volatilities on Tower Semiconductor 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 Tower Semiconductor with a short position of Camtek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tower Semiconductor and Camtek.
Diversification Opportunities for Tower Semiconductor and Camtek
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tower and Camtek is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Tower Semiconductor and Camtek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camtek 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 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 Tower Semiconductor i.e., Tower Semiconductor and Camtek go up and down completely randomly.
Pair Corralation between Tower Semiconductor and Camtek
Assuming the 90 days trading horizon Tower Semiconductor is expected to generate 5.68 times less return on investment than Camtek. But when comparing it to its historical volatility, Tower Semiconductor is 1.49 times less risky than Camtek. It trades about 0.03 of its potential returns per unit of risk. Camtek is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 930,989 in Camtek on November 2, 2024 and sell it today you would earn a total of 2,233,011 from holding Camtek or generate 239.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tower Semiconductor vs. Camtek
Performance |
| Timeline |
| Tower Semiconductor |
| Camtek |
Tower Semiconductor and Camtek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tower Semiconductor and Camtek
The main advantage of trading using opposite Tower Semiconductor and Camtek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower Semiconductor 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.| Tower Semiconductor vs. Teva Pharmaceutical Industries | Tower Semiconductor vs. Elbit Systems | Tower Semiconductor vs. Nice | Tower Semiconductor vs. Bezeq Israeli Telecommunication |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |