Correlation Between Canaan and Ichor Holdings

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

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

Diversification Opportunities for Canaan and Ichor Holdings

0.59

Correlation Coefficient

Canaan  Ichor Holdings

Very weak diversification

The 3 months correlation between Canaan and Ichor is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Canaan Inc and Ichor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Holdings and Canaan 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 Canaan Inc 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 Canaan i.e., Canaan and Ichor Holdings go up and down completely randomly.

Pair Corralation between Canaan and Ichor Holdings

Considering the 90-day investment horizon Canaan Inc is expected to under-perform the Ichor Holdings. In addition to that, Canaan is 1.6 times more volatile than Ichor Holdings. It trades about -0.19 of its total potential returns per unit of risk. Ichor Holdings is currently generating about -0.07 per unit of volatility. If you would invest  3,100  in Ichor Holdings on December 28, 2024 and sell it today you would lose (581.00) from holding Ichor Holdings or give up 18.74% of portfolio value over 90 days.

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

Canaan Inc  vs.  Ichor Holdings

Canaan Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canaan Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Ichor Holdings

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's technical indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Canaan and Ichor Holdings

The main advantage of trading using opposite Canaan and Ichor Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaan 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 Canaan Inc 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.