Correlation Between AIXTRON SE and Ichor Holdings

Can any of the company-specific risk be diversified away by investing in both AIXTRON SE 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 AIXTRON SE and Ichor Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AIXTRON SE and Ichor Holdings, you can compare the effects of market volatilities on AIXTRON SE 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 AIXTRON SE with a short position of Ichor Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIXTRON SE and Ichor Holdings.

Diversification Opportunities for AIXTRON SE and Ichor Holdings

-0.49

Correlation Coefficient

AIXTRON SE  Ichor Holdings

Very good diversification

The 3 months correlation between AIXTRON and Ichor is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding AIXTRON SE and Ichor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Holdings and AIXTRON SE 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 AIXTRON SE 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 AIXTRON SE i.e., AIXTRON SE and Ichor Holdings go up and down completely randomly.

Pair Corralation between AIXTRON SE and Ichor Holdings

Assuming the 90 days horizon AIXTRON SE is expected to under-perform the Ichor Holdings. In addition to that, AIXTRON SE is 1.18 times more volatile than Ichor Holdings. It trades about -0.09 of its total potential returns per unit of risk. Ichor Holdings is currently generating about 0.02 per unit of volatility. If you would invest  3,151  in Ichor Holdings on September 13, 2024 and sell it today you would earn a total of  159.00  from holding Ichor Holdings or generate 5.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	89.52%
Values	Daily Returns

AIXTRON SE  vs.  Ichor Holdings

AIXTRON SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AIXTRON SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Ichor Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ichor Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical indicators, Ichor Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AIXTRON SE and Ichor Holdings

The main advantage of trading using opposite AIXTRON SE and Ichor Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIXTRON SE 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.

The idea behind AIXTRON SE and Ichor Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.