Correlation Between Tower Semiconductor and Nextage Therapeutics
Can any of the company-specific risk be diversified away by investing in both Tower Semiconductor and Nextage Therapeutics 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 Nextage Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tower Semiconductor and Nextage Therapeutics, you can compare the effects of market volatilities on Tower Semiconductor and Nextage Therapeutics 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 Nextage Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tower Semiconductor and Nextage Therapeutics.
Diversification Opportunities for Tower Semiconductor and Nextage Therapeutics
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tower and Nextage is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Tower Semiconductor and Nextage Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextage Therapeutics 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 Nextage Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextage Therapeutics has no effect on the direction of Tower Semiconductor i.e., Tower Semiconductor and Nextage Therapeutics go up and down completely randomly.
Pair Corralation between Tower Semiconductor and Nextage Therapeutics
Assuming the 90 days trading horizon Tower Semiconductor is expected to generate 0.36 times more return on investment than Nextage Therapeutics. However, Tower Semiconductor is 2.81 times less risky than Nextage Therapeutics. It trades about 0.18 of its potential returns per unit of risk. Nextage Therapeutics is currently generating about 0.04 per unit of risk. If you would invest 1,748,000 in Tower Semiconductor on October 25, 2024 and sell it today you would earn a total of 196,000 from holding Tower Semiconductor or generate 11.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.14% |
| Values | Daily Returns |
Tower Semiconductor vs. Nextage Therapeutics
Performance |
| Timeline |
| Tower Semiconductor |
| Nextage Therapeutics |
Tower Semiconductor and Nextage Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tower Semiconductor and Nextage Therapeutics
The main advantage of trading using opposite Tower Semiconductor and Nextage Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower Semiconductor position performs unexpectedly, Nextage Therapeutics 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 Nextage Therapeutics will offset losses from the drop in Nextage Therapeutics' long position.| Tower Semiconductor vs. Teva Pharmaceutical Industries | Tower Semiconductor vs. Elbit Systems | Tower Semiconductor vs. Nice | Tower Semiconductor vs. Bezeq Israeli Telecommunication |
| Nextage Therapeutics vs. Ram On Investments and | Nextage Therapeutics vs. Meitav Dash Investments | Nextage Therapeutics vs. Feat Fund Investments | Nextage Therapeutics vs. Tower Semiconductor |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |