Correlation Between NSANY and Tower Semiconductor
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By analyzing existing cross correlation between NSANY 275 09 MAR 28 and Tower Semiconductor, you can compare the effects of market volatilities on NSANY and Tower Semiconductor 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 NSANY with a short position of Tower Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of NSANY and Tower Semiconductor.
Diversification Opportunities for NSANY and Tower Semiconductor
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NSANY and Tower is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding NSANY 275 09 MAR 28 and Tower Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower Semiconductor and NSANY 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 NSANY 275 09 MAR 28 are associated (or correlated) with Tower Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower Semiconductor has no effect on the direction of NSANY i.e., NSANY and Tower Semiconductor go up and down completely randomly.
Pair Corralation between NSANY and Tower Semiconductor
Assuming the 90 days trading horizon NSANY 275 09 MAR 28 is expected to under-perform the Tower Semiconductor. But the bond apears to be less risky and, when comparing its historical volatility, NSANY 275 09 MAR 28 is 3.55 times less risky than Tower Semiconductor. The bond trades about -0.08 of its potential returns per unit of risk. The Tower Semiconductor is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,405 in Tower Semiconductor on October 23, 2024 and sell it today you would earn a total of 853.00 from holding Tower Semiconductor or generate 19.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 81.67% |
Values | Daily Returns |
NSANY 275 09 MAR 28 vs. Tower Semiconductor
Performance |
Timeline |
NSANY 275 09 |
Tower Semiconductor |
NSANY and Tower Semiconductor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NSANY and Tower Semiconductor
The main advantage of trading using opposite NSANY and Tower Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NSANY position performs unexpectedly, Tower Semiconductor 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 Tower Semiconductor will offset losses from the drop in Tower Semiconductor's long position.The idea behind NSANY 275 09 MAR 28 and Tower Semiconductor 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.Tower Semiconductor vs. Nova | Tower Semiconductor vs. AudioCodes | Tower Semiconductor vs. Nice Ltd ADR | Tower Semiconductor vs. Elbit Systems |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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