Correlation Between Camtek and MACOM Technology

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

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

Diversification Opportunities for Camtek and MACOM Technology

0.81

Correlation Coefficient

Camtek  MACOM Technology

Very poor diversification

The 3 months correlation between Camtek and MACOM is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Camtek and MACOM Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACOM Technology Sol and Camtek 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 Camtek are associated (or correlated) with MACOM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MACOM Technology Sol has no effect on the direction of Camtek i.e., Camtek and MACOM Technology go up and down completely randomly.

Pair Corralation between Camtek and MACOM Technology

Given the investment horizon of 90 days Camtek is expected to generate 1.57 times more return on investment than MACOM Technology. However, Camtek is 1.57 times more volatile than MACOM Technology Solutions. It trades about 0.13 of its potential returns per unit of risk. MACOM Technology Solutions is currently generating about -0.03 per unit of risk. If you would invest  6,983  in Camtek on May 14, 2025 and sell it today you would earn a total of  1,694  from holding Camtek or generate 24.26% return on investment over 90 days.

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

Camtek  vs.  MACOM Technology Solutions

Camtek

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Camtek are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating primary indicators, Camtek unveiled solid returns over the last few months and may actually be approaching a breakup point.

MACOM Technology Sol

Risk-Adjusted Performance

Weakest

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

Pair Trading with Camtek and MACOM Technology

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

The idea behind Camtek and MACOM Technology Solutions 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.