Correlation Between Amtech Systems and Tokyo Electron

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

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

Diversification Opportunities for Amtech Systems and Tokyo Electron

0.44

Correlation Coefficient

Amtech Systems  Tokyo Electron

Very weak diversification

The 3 months correlation between Amtech and Tokyo is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Amtech Systems and Tokyo Electron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyo Electron 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 Tokyo Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyo Electron has no effect on the direction of Amtech Systems i.e., Amtech Systems and Tokyo Electron go up and down completely randomly.

Pair Corralation between Amtech Systems and Tokyo Electron

Given the investment horizon of 90 days Amtech Systems is expected to generate 0.73 times more return on investment than Tokyo Electron. However, Amtech Systems is 1.38 times less risky than Tokyo Electron. It trades about -0.02 of its potential returns per unit of risk. Tokyo Electron is currently generating about -0.03 per unit of risk. If you would invest  591.00  in Amtech Systems on September 23, 2024 and sell it today you would lose (31.00) from holding Amtech Systems or give up 5.25% of portfolio value over 90 days.

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

Amtech Systems  vs.  Tokyo Electron

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Tokyo Electron

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Amtech Systems and Tokyo Electron

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

The idea behind Amtech Systems and Tokyo Electron 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.