Correlation Between Camtek and Nova
Can any of the company-specific risk be diversified away by investing in both Camtek and Nova 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 Nova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camtek and Nova, you can compare the effects of market volatilities on Camtek and Nova 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 Nova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camtek and Nova.
Diversification Opportunities for Camtek and Nova
Poor diversification
The 3 months correlation between Camtek and Nova is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Camtek and Nova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova 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 Nova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova has no effect on the direction of Camtek i.e., Camtek and Nova go up and down completely randomly.
Pair Corralation between Camtek and Nova
Assuming the 90 days trading horizon Camtek is expected to generate 1.88 times more return on investment than Nova. However, Camtek is 1.88 times more volatile than Nova. It trades about 0.14 of its potential returns per unit of risk. Nova is currently generating about 0.01 per unit of risk. If you would invest 2,877,601 in Camtek on January 20, 2024 and sell it today you would earn a total of 184,399 from holding Camtek or generate 6.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Camtek vs. Nova
Performance |
| Timeline |
| Camtek |
| Nova |
Camtek and Nova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camtek and Nova
The main advantage of trading using opposite Camtek and Nova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camtek position performs unexpectedly, Nova 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 Nova will offset losses from the drop in Nova's long position.| Camtek vs. Tower Semiconductor | Camtek vs. Nice | Camtek vs. Elbit Systems | Camtek vs. Sapiens International |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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