Correlation Between Sumco Corp and Amtech Systems

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

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

Diversification Opportunities for Sumco Corp and Amtech Systems

0.44

Correlation Coefficient

Sumco Corp  Amtech Systems

Very weak diversification

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

Pair Corralation between Sumco Corp and Amtech Systems

Assuming the 90 days horizon Sumco Corp ADR is expected to under-perform the Amtech Systems. In addition to that, Sumco Corp is 1.1 times more volatile than Amtech Systems. It trades about -0.15 of its total potential returns per unit of risk. Amtech Systems is currently generating about -0.01 per unit of volatility. If you would invest  609.00  in Amtech Systems on September 22, 2024 and sell it today you would lose (49.00) from holding Amtech Systems or give up 8.05% of portfolio value over 90 days.

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

Sumco Corp ADR  vs.  Amtech Systems

Sumco Corp ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sumco Corp ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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.

Pair Trading with Sumco Corp and Amtech Systems

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

The idea behind Sumco Corp ADR and Amtech Systems 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.