Correlation Between Ichor Holdings and ASM International

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

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

Diversification Opportunities for Ichor Holdings and ASM International

0.3

Correlation Coefficient

Ichor Holdings  ASM International

Weak diversification

The 3 months correlation between Ichor and ASM is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ichor Holdings and ASM International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASM International and Ichor Holdings 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 Ichor Holdings are associated (or correlated) with ASM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASM International has no effect on the direction of Ichor Holdings i.e., Ichor Holdings and ASM International go up and down completely randomly.

Pair Corralation between Ichor Holdings and ASM International

Given the investment horizon of 90 days Ichor Holdings is expected to under-perform the ASM International. But the stock apears to be less risky and, when comparing its historical volatility, Ichor Holdings is 1.63 times less risky than ASM International. The stock trades about -0.08 of its potential returns per unit of risk. The ASM International NV is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  63,438  in ASM International NV on March 8, 2024 and sell it today you would earn a total of  6,938  from holding ASM International NV or generate 10.94% return on investment over 90 days.

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

Ichor Holdings  vs.  ASM International NV

Ichor Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ichor Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's technical indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

ASM International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ASM International NV are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, ASM International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ichor Holdings and ASM International

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

The idea behind Ichor Holdings and ASM International NV 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.