Correlation Between Supercom and Camtek

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

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

Diversification Opportunities for Supercom and Camtek

0.79

Correlation Coefficient

Supercom  Camtek

Poor diversification

The 3 months correlation between Supercom and Camtek is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and Camtek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camtek and Supercom 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 Supercom are associated (or correlated) with Camtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camtek has no effect on the direction of Supercom i.e., Supercom and Camtek go up and down completely randomly.

Pair Corralation between Supercom and Camtek

Given the investment horizon of 90 days Supercom is expected to generate 2.98 times more return on investment than Camtek. However, Supercom is 2.98 times more volatile than Camtek. It trades about 0.08 of its potential returns per unit of risk. Camtek is currently generating about -0.11 per unit of risk. If you would invest  595.00  in Supercom on December 29, 2024 and sell it today you would earn a total of  135.00  from holding Supercom or generate 22.69% return on investment over 90 days.

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

Supercom  vs.  Camtek

Supercom

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Supercom are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental indicators, Supercom sustained solid returns over the last few months and may actually be approaching a breakup point.

Camtek

Risk-Adjusted Performance

Very Weak

Over the last 90 days Camtek has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Supercom and Camtek

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

The idea behind Supercom and Camtek 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.