Correlation Between Ichor Holdings and Photronics

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

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

Diversification Opportunities for Ichor Holdings and Photronics

0.42

Correlation Coefficient

Ichor Holdings  Photronics

Very weak diversification

The 3 months correlation between Ichor and Photronics is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ichor Holdings and Photronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photronics and Ichor Holdings 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 Ichor Holdings are associated (or correlated) with Photronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photronics has no effect on the direction of Ichor Holdings i.e., Ichor Holdings and Photronics go up and down completely randomly.

Pair Corralation between Ichor Holdings and Photronics

Given the investment horizon of 90 days Ichor Holdings is expected to generate 1.14 times more return on investment than Photronics. However, Ichor Holdings is 1.14 times more volatile than Photronics. It trades about 0.11 of its potential returns per unit of risk. Photronics is currently generating about 0.04 per unit of risk. If you would invest  1,600  in Ichor Holdings on May 6, 2025 and sell it today you would earn a total of  338.00  from holding Ichor Holdings or generate 21.13% return on investment over 90 days.

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

Ichor Holdings  vs.  Photronics

Ichor Holdings

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ichor Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical indicators, Ichor Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Photronics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Photronics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Photronics may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Ichor Holdings and Photronics

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

The idea behind Ichor Holdings and Photronics 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.