Correlation Between Sunny Optical and Elmos Semiconductor
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Elmos Semiconductor 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 Sunny Optical and Elmos Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunny Optical Technology and Elmos Semiconductor SE, you can compare the effects of market volatilities on Sunny Optical and Elmos Semiconductor 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 Sunny Optical with a short position of Elmos Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Elmos Semiconductor.
Diversification Opportunities for Sunny Optical and Elmos Semiconductor
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunny and Elmos is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor and Sunny Optical 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 Sunny Optical Technology are associated (or correlated) with Elmos Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elmos Semiconductor has no effect on the direction of Sunny Optical i.e., Sunny Optical and Elmos Semiconductor go up and down completely randomly.
Pair Corralation between Sunny Optical and Elmos Semiconductor
Assuming the 90 days trading horizon Sunny Optical Technology is expected to generate 1.76 times more return on investment than Elmos Semiconductor. However, Sunny Optical is 1.76 times more volatile than Elmos Semiconductor SE. It trades about 0.21 of its potential returns per unit of risk. Elmos Semiconductor SE is currently generating about -0.24 per unit of risk. If you would invest 6,675 in Sunny Optical Technology on November 8, 2024 and sell it today you would earn a total of 1,290 from holding Sunny Optical Technology or generate 19.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. Elmos Semiconductor SE
Performance |
| Timeline |
| Sunny Optical Technology |
| Elmos Semiconductor |
Sunny Optical and Elmos Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Elmos Semiconductor
The main advantage of trading using opposite Sunny Optical and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Elmos Semiconductor 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 Elmos Semiconductor will offset losses from the drop in Elmos Semiconductor's long position.| Sunny Optical vs. Electronic Arts | Sunny Optical vs. Albion Technology General | Sunny Optical vs. Arcticzymes Technologies ASA | Sunny Optical vs. Roper Technologies |
| Elmos Semiconductor vs. Qurate Retail Series | Elmos Semiconductor vs. Europa Metals | Elmos Semiconductor vs. Flow Traders NV | Elmos Semiconductor vs. Universal Display Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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