Correlation Between Veeco Instruments and EMCORE
Can any of the company-specific risk be diversified away by investing in both Veeco Instruments and EMCORE 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 Veeco Instruments and EMCORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veeco Instruments and EMCORE, you can compare the effects of market volatilities on Veeco Instruments and EMCORE 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 Veeco Instruments with a short position of EMCORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veeco Instruments and EMCORE.
Diversification Opportunities for Veeco Instruments and EMCORE
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Veeco and EMCORE is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Veeco Instruments and EMCORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCORE and Veeco Instruments 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 Veeco Instruments are associated (or correlated) with EMCORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCORE has no effect on the direction of Veeco Instruments i.e., Veeco Instruments and EMCORE go up and down completely randomly.
Pair Corralation between Veeco Instruments and EMCORE
Given the investment horizon of 90 days Veeco Instruments is expected to under-perform the EMCORE. But the stock apears to be less risky and, when comparing its historical volatility, Veeco Instruments is 3.09 times less risky than EMCORE. The stock trades about -0.17 of its potential returns per unit of risk. The EMCORE is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 201.00 in EMCORE on August 31, 2024 and sell it today you would earn a total of 97.00 from holding EMCORE or generate 48.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Veeco Instruments vs. EMCORE
Performance |
| Timeline |
| Veeco Instruments |
| EMCORE |
Veeco Instruments and EMCORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veeco Instruments and EMCORE
The main advantage of trading using opposite Veeco Instruments and EMCORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veeco Instruments position performs unexpectedly, EMCORE 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 EMCORE will offset losses from the drop in EMCORE's long position.| Veeco Instruments vs. NVE Corporation | Veeco Instruments vs. Photronics | Veeco Instruments vs. Kulicke and Soffa | Veeco Instruments vs. Alvarium Tiedemann Holdings |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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