Correlation Between Elmos Semiconductor and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and Antofagasta PLC 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 Antofagasta PLC 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 Antofagasta PLC, you can compare the effects of market volatilities on Elmos Semiconductor and Antofagasta PLC 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 Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and Antofagasta PLC.
Diversification Opportunities for Elmos Semiconductor and Antofagasta PLC
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elmos and Antofagasta is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta PLC 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 Antofagasta PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta PLC has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and Antofagasta PLC go up and down completely randomly.
Pair Corralation between Elmos Semiconductor and Antofagasta PLC
Assuming the 90 days trading horizon Elmos Semiconductor is expected to generate 1.85 times less return on investment than Antofagasta PLC. In addition to that, Elmos Semiconductor is 1.77 times more volatile than Antofagasta PLC. It trades about 0.07 of its total potential returns per unit of risk. Antofagasta PLC is currently generating about 0.21 per unit of volatility. If you would invest 159,100 in Antofagasta PLC on November 4, 2024 and sell it today you would earn a total of 13,400 from holding Antofagasta PLC or generate 8.42% 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. Antofagasta PLC
Performance |
| Timeline |
| Elmos Semiconductor |
| Antofagasta PLC |
Elmos Semiconductor and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elmos Semiconductor and Antofagasta PLC
The main advantage of trading using opposite Elmos Semiconductor and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elmos Semiconductor position performs unexpectedly, Antofagasta PLC 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 Antofagasta PLC will offset losses from the drop in Antofagasta PLC's long position.| Elmos Semiconductor vs. Bankers Investment Trust | Elmos Semiconductor vs. Ecofin Global Utilities | Elmos Semiconductor vs. Kinnevik Investment AB | Elmos Semiconductor vs. Lindsell Train Investment |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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