Correlation Between Tower Semiconductor and Silver Castle
Can any of the company-specific risk be diversified away by investing in both Tower Semiconductor and Silver Castle 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 Silver Castle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tower Semiconductor and Silver Castle Holdings, you can compare the effects of market volatilities on Tower Semiconductor and Silver Castle 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 Silver Castle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tower Semiconductor and Silver Castle.
Diversification Opportunities for Tower Semiconductor and Silver Castle
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tower and Silver is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Tower Semiconductor and Silver Castle Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Castle Holdings 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 Silver Castle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Castle Holdings has no effect on the direction of Tower Semiconductor i.e., Tower Semiconductor and Silver Castle go up and down completely randomly.
Pair Corralation between Tower Semiconductor and Silver Castle
Assuming the 90 days trading horizon Tower Semiconductor is expected to generate 52.04 times less return on investment than Silver Castle. But when comparing it to its historical volatility, Tower Semiconductor is 21.21 times less risky than Silver Castle. It trades about 0.02 of its potential returns per unit of risk. Silver Castle Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 121,100 in Silver Castle Holdings on September 3, 2024 and sell it today you would lose (65,910) from holding Silver Castle Holdings or give up 54.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tower Semiconductor vs. Silver Castle Holdings
Performance |
| Timeline |
| Tower Semiconductor |
| Silver Castle Holdings |
Tower Semiconductor and Silver Castle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tower Semiconductor and Silver Castle
The main advantage of trading using opposite Tower Semiconductor and Silver Castle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower Semiconductor position performs unexpectedly, Silver Castle 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 Silver Castle will offset losses from the drop in Silver Castle's long position.| Tower Semiconductor vs. Teva Pharmaceutical Industries | Tower Semiconductor vs. Elbit Systems | Tower Semiconductor vs. Nice | Tower Semiconductor vs. Bezeq Israeli Telecommunication |
| Silver Castle vs. Multi Retail Group | Silver Castle vs. Harel Insurance Investments | Silver Castle vs. Tower Semiconductor | Silver Castle vs. Ram On Investments and |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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