Correlation Between Elmos Semiconductor and X FAB
Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and X FAB 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 X FAB 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on Elmos Semiconductor and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and X FAB.
Diversification Opportunities for Elmos Semiconductor and X FAB
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elmos and 0ROZ is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and X FAB go up and down completely randomly.
Pair Corralation between Elmos Semiconductor and X FAB
Assuming the 90 days trading horizon Elmos Semiconductor SE is expected to generate 1.05 times more return on investment than X FAB. However, Elmos Semiconductor is 1.05 times more volatile than X FAB Silicon Foundries. It trades about -0.02 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.13 per unit of risk. If you would invest 7,800 in Elmos Semiconductor SE on August 27, 2024 and sell it today you would lose (1,575) from holding Elmos Semiconductor SE or give up 20.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.81% |
| Values | Daily Returns |
Elmos Semiconductor SE vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Elmos Semiconductor |
| X FAB Silicon |
Elmos Semiconductor and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elmos Semiconductor and X FAB
The main advantage of trading using opposite Elmos Semiconductor and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elmos Semiconductor position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| Elmos Semiconductor vs. Samsung Electronics Co | Elmos Semiconductor vs. Samsung Electronics Co | Elmos Semiconductor vs. Hyundai Motor | Elmos Semiconductor vs. Toyota Motor Corp |
| X FAB vs. Zoom Video Communications | X FAB vs. Tata Steel Limited | X FAB vs. LPKF Laser Electronics | X FAB vs. Batm Advanced Communications |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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