Correlation Between Camtek and Ichor Holdings

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

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

Diversification Opportunities for Camtek and Ichor Holdings

0.07

Correlation Coefficient

Camtek  Ichor Holdings

Significant diversification

The 3 months correlation between Camtek and Ichor is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Camtek and Ichor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Holdings and Camtek 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 Camtek 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 Camtek i.e., Camtek and Ichor Holdings go up and down completely randomly.

Pair Corralation between Camtek and Ichor Holdings

Given the investment horizon of 90 days Camtek is expected to under-perform the Ichor Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Camtek is 1.07 times less risky than Ichor Holdings. The stock trades about -0.04 of its potential returns per unit of risk. The Ichor Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,872  in Ichor Holdings on August 31, 2024 and sell it today you would earn a total of  344.00  from holding Ichor Holdings or generate 11.98% return on investment over 90 days.

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

Camtek  vs.  Ichor Holdings

Camtek

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Camtek has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Ichor Holdings

Risk-Adjusted Performance

5 of 100

Weak

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 Camtek and Ichor Holdings

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

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.