Correlation Between Tower Semiconductor and Epitomee Medical

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Can any of the company-specific risk be diversified away by investing in both Tower Semiconductor and Epitomee Medical 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 Epitomee Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tower Semiconductor and Epitomee Medical, you can compare the effects of market volatilities on Tower Semiconductor and Epitomee Medical 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 Epitomee Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tower Semiconductor and Epitomee Medical.

Diversification Opportunities for Tower Semiconductor and Epitomee Medical

0.41
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Tower and Epitomee is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Tower Semiconductor and Epitomee Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epitomee Medical 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 Epitomee Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epitomee Medical has no effect on the direction of Tower Semiconductor i.e., Tower Semiconductor and Epitomee Medical go up and down completely randomly.

Pair Corralation between Tower Semiconductor and Epitomee Medical

Assuming the 90 days trading horizon Tower Semiconductor is expected to generate 0.67 times more return on investment than Epitomee Medical. However, Tower Semiconductor is 1.49 times less risky than Epitomee Medical. It trades about 0.18 of its potential returns per unit of risk. Epitomee Medical is currently generating about 0.07 per unit of risk. If you would invest  1,341,000  in Tower Semiconductor on April 23, 2025 and sell it today you would earn a total of  283,000  from holding Tower Semiconductor or generate 21.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Tower Semiconductor  vs.  Epitomee Medical

 Performance 
       Timeline  
Tower Semiconductor 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Tower Semiconductor are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tower Semiconductor sustained solid returns over the last few months and may actually be approaching a breakup point.
Epitomee Medical 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Epitomee Medical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Epitomee Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Tower Semiconductor and Epitomee Medical Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tower Semiconductor and Epitomee Medical

The main advantage of trading using opposite Tower Semiconductor and Epitomee Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower Semiconductor position performs unexpectedly, Epitomee Medical 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 Epitomee Medical will offset losses from the drop in Epitomee Medical's long position.
The idea behind Tower Semiconductor and Epitomee Medical 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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