Correlation Between Elmos Semiconductor and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and LPKF Laser 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 LPKF Laser 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 LPKF Laser Electronics, you can compare the effects of market volatilities on Elmos Semiconductor and LPKF Laser 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 LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and LPKF Laser.
Diversification Opportunities for Elmos Semiconductor and LPKF Laser
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elmos and LPKF is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and LPKF Laser Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPKF Laser Electronics 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 LPKF Laser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPKF Laser Electronics has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and LPKF Laser go up and down completely randomly.
Pair Corralation between Elmos Semiconductor and LPKF Laser
Assuming the 90 days trading horizon Elmos Semiconductor SE is expected to generate 5.65 times more return on investment than LPKF Laser. However, Elmos Semiconductor is 5.65 times more volatile than LPKF Laser Electronics. It trades about 0.16 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about -0.15 per unit of risk. If you would invest 5,515 in Elmos Semiconductor SE on September 1, 2024 and sell it today you would earn a total of 710.00 from holding Elmos Semiconductor SE or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elmos Semiconductor SE vs. LPKF Laser Electronics
Performance |
| Timeline |
| Elmos Semiconductor |
| LPKF Laser Electronics |
Elmos Semiconductor and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elmos Semiconductor and LPKF Laser
The main advantage of trading using opposite Elmos Semiconductor and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elmos Semiconductor position performs unexpectedly, LPKF Laser 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 LPKF Laser will offset losses from the drop in LPKF Laser's long position.| Elmos Semiconductor vs. Spirent Communications plc | Elmos Semiconductor vs. Gamma Communications PLC | Elmos Semiconductor vs. DXC Technology Co | Elmos Semiconductor vs. Roper Technologies |
| LPKF Laser vs. Coor Service Management | LPKF Laser vs. Empire Metals Limited | LPKF Laser vs. Adriatic Metals | LPKF Laser vs. Golden Metal Resources |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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