Correlation Between Veeco Instruments and Ichor Holdings
Can any of the company-specific risk be diversified away by investing in both Veeco Instruments and Ichor Holdings 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 Ichor Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veeco Instruments and Ichor Holdings, you can compare the effects of market volatilities on Veeco Instruments and Ichor Holdings 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 Ichor Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veeco Instruments and Ichor Holdings.
Diversification Opportunities for Veeco Instruments and Ichor Holdings
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Veeco and Ichor is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Veeco Instruments and Ichor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Holdings 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 Ichor Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichor Holdings has no effect on the direction of Veeco Instruments i.e., Veeco Instruments and Ichor Holdings go up and down completely randomly.
Pair Corralation between Veeco Instruments and Ichor Holdings
Given the investment horizon of 90 days Veeco Instruments is expected to under-perform the Ichor Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Veeco Instruments is 1.46 times less risky than Ichor Holdings. The stock trades about -0.13 of its potential returns per unit of risk. The Ichor Holdings is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 3,015 in Ichor Holdings on October 31, 2024 and sell it today you would lose (295.00) from holding Ichor Holdings or give up 9.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Veeco Instruments vs. Ichor Holdings
Performance |
| Timeline |
| Veeco Instruments |
| Ichor Holdings |
Veeco Instruments and Ichor Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veeco Instruments and Ichor Holdings
The main advantage of trading using opposite Veeco Instruments and Ichor Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veeco Instruments position performs unexpectedly, Ichor Holdings 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 Ichor Holdings will offset losses from the drop in Ichor Holdings' long position.| Veeco Instruments vs. NVE Corporation | Veeco Instruments vs. Photronics | Veeco Instruments vs. Kulicke and Soffa | Veeco Instruments vs. Alvarium Tiedemann Holdings |
| Ichor Holdings vs. Diodes Incorporated | Ichor Holdings vs. Daqo New Energy | Ichor Holdings vs. Micron Technology | Ichor Holdings vs. MagnaChip 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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