Correlation Between Amtech Systems and InTest

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

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

Diversification Opportunities for Amtech Systems and InTest

-0.47

Correlation Coefficient

Amtech Systems  InTest

Very good diversification

The 3 months correlation between Amtech and InTest is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Amtech Systems and inTest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on inTest and Amtech Systems 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 Amtech Systems are associated (or correlated) with InTest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of inTest has no effect on the direction of Amtech Systems i.e., Amtech Systems and InTest go up and down completely randomly.

Pair Corralation between Amtech Systems and InTest

Given the investment horizon of 90 days Amtech Systems is expected to under-perform the InTest. But the stock apears to be less risky and, when comparing its historical volatility, Amtech Systems is 1.33 times less risky than InTest. The stock trades about -0.02 of its potential returns per unit of risk. The inTest is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  641.00  in inTest on September 21, 2024 and sell it today you would earn a total of  127.00  from holding inTest or generate 19.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Amtech Systems  vs.  inTest

Amtech Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amtech Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Amtech Systems is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

inTest

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in inTest are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, InTest unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amtech Systems and InTest

The main advantage of trading using opposite Amtech Systems and InTest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amtech Systems position performs unexpectedly, InTest 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 InTest will offset losses from the drop in InTest's long position.

The idea behind Amtech Systems and inTest 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.