Correlation Between Elmos Semiconductor and HCA Healthcare
Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and HCA Healthcare 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 Elmos Semiconductor and HCA Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elmos Semiconductor SE and HCA Healthcare, you can compare the effects of market volatilities on Elmos Semiconductor and HCA Healthcare 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 Elmos Semiconductor with a short position of HCA Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and HCA Healthcare.
Diversification Opportunities for Elmos Semiconductor and HCA Healthcare
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elmos and HCA is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare and Elmos 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 Elmos Semiconductor SE are associated (or correlated) with HCA Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCA Healthcare has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and HCA Healthcare go up and down completely randomly.
Pair Corralation between Elmos Semiconductor and HCA Healthcare
Assuming the 90 days trading horizon Elmos Semiconductor SE is expected to generate 2.61 times more return on investment than HCA Healthcare. However, Elmos Semiconductor is 2.61 times more volatile than HCA Healthcare. It trades about 0.26 of its potential returns per unit of risk. HCA Healthcare is currently generating about 0.02 per unit of risk. If you would invest 6,715 in Elmos Semiconductor SE on October 13, 2024 and sell it today you would earn a total of 1,130 from holding Elmos Semiconductor SE or generate 16.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elmos Semiconductor SE vs. HCA Healthcare
Performance |
| Timeline |
| Elmos Semiconductor |
| HCA Healthcare |
Elmos Semiconductor and HCA Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elmos Semiconductor and HCA Healthcare
The main advantage of trading using opposite Elmos Semiconductor and HCA Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elmos Semiconductor position performs unexpectedly, HCA Healthcare 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 HCA Healthcare will offset losses from the drop in HCA Healthcare's long position.| Elmos Semiconductor vs. Eastman Chemical Co | Elmos Semiconductor vs. Canadian General Investments | Elmos Semiconductor vs. International Biotechnology Trust | Elmos Semiconductor vs. Hilton Food Group |
| HCA Healthcare vs. Elmos Semiconductor SE | HCA Healthcare vs. Molson Coors Beverage | HCA Healthcare vs. Advanced Medical Solutions | HCA Healthcare vs. BE Semiconductor Industries |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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