Correlation Between Tower Semiconductor and Lineage Cell
Can any of the company-specific risk be diversified away by investing in both Tower Semiconductor and Lineage Cell 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 Tower Semiconductor and Lineage Cell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tower Semiconductor and Lineage Cell Therapeutics, you can compare the effects of market volatilities on Tower Semiconductor and Lineage Cell 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 Tower Semiconductor with a short position of Lineage Cell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tower Semiconductor and Lineage Cell.
Diversification Opportunities for Tower Semiconductor and Lineage Cell
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tower and Lineage is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Tower Semiconductor and Lineage Cell Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lineage Cell Therapeutics and Tower Semiconductor 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 Tower Semiconductor are associated (or correlated) with Lineage Cell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lineage Cell Therapeutics has no effect on the direction of Tower Semiconductor i.e., Tower Semiconductor and Lineage Cell go up and down completely randomly.
Pair Corralation between Tower Semiconductor and Lineage Cell
Assuming the 90 days trading horizon Tower Semiconductor is expected to under-perform the Lineage Cell. But the stock apears to be less risky and, when comparing its historical volatility, Tower Semiconductor is 3.01 times less risky than Lineage Cell. The stock trades about -0.03 of its potential returns per unit of risk. The Lineage Cell Therapeutics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 45,670 in Lineage Cell Therapeutics on January 25, 2024 and sell it today you would lose (940.00) from holding Lineage Cell Therapeutics or give up 2.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tower Semiconductor vs. Lineage Cell Therapeutics
Performance |
| Timeline |
| Tower Semiconductor |
| Lineage Cell Therapeutics |
Tower Semiconductor and Lineage Cell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tower Semiconductor and Lineage Cell
The main advantage of trading using opposite Tower Semiconductor and Lineage Cell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower Semiconductor position performs unexpectedly, Lineage Cell 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 Lineage Cell will offset losses from the drop in Lineage Cell's long position.| Tower Semiconductor vs. C Mer Industries | Tower Semiconductor vs. Ralco Agencies | Tower Semiconductor vs. Brimag L |
| Lineage Cell vs. Evogene | Lineage Cell vs. Kamada | Lineage Cell vs. Tower Semiconductor | Lineage Cell 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |