Correlation Between Amtech Systems and Nova

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

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

Diversification Opportunities for Amtech Systems and Nova

0.03

Correlation Coefficient

Amtech Systems  Nova

Significant diversification

The 3 months correlation between Amtech and Nova is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Amtech Systems and Nova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova 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 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 Amtech Systems i.e., Amtech Systems and Nova go up and down completely randomly.

Pair Corralation between Amtech Systems and Nova

Given the investment horizon of 90 days Amtech Systems is expected to under-perform the Nova. In addition to that, Amtech Systems is 1.0 times more volatile than Nova. It trades about -0.03 of its total potential returns per unit of risk. Nova is currently generating about 0.01 per unit of volatility. If you would invest  19,718  in Nova on December 28, 2024 and sell it today you would lose (435.00) from holding Nova or give up 2.21% of portfolio value over 90 days.

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

Amtech Systems  vs.  Nova

Amtech Systems

Risk-Adjusted Performance

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 latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Nova

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nova has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, Nova is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Amtech Systems and Nova

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

The idea behind Amtech Systems and Nova 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.