Correlation Between Aedas Homes and Elmos Semiconductor
Can any of the company-specific risk be diversified away by investing in both Aedas Homes 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 Aedas Homes and Elmos Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aedas Homes SA and Elmos Semiconductor SE, you can compare the effects of market volatilities on Aedas Homes 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 Aedas Homes with a short position of Elmos Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedas Homes and Elmos Semiconductor.
Diversification Opportunities for Aedas Homes and Elmos Semiconductor
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aedas and Elmos is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aedas Homes SA and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor and Aedas Homes 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 Aedas Homes SA 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 Aedas Homes i.e., Aedas Homes and Elmos Semiconductor go up and down completely randomly.
Pair Corralation between Aedas Homes and Elmos Semiconductor
Assuming the 90 days horizon Aedas Homes SA is expected to generate 0.66 times more return on investment than Elmos Semiconductor. However, Aedas Homes SA is 1.51 times less risky than Elmos Semiconductor. It trades about 0.14 of its potential returns per unit of risk. Elmos Semiconductor SE is currently generating about 0.0 per unit of risk. If you would invest 892.00 in Aedas Homes SA on December 13, 2024 and sell it today you would earn a total of 1,913 from holding Aedas Homes SA or generate 214.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aedas Homes SA vs. Elmos Semiconductor SE
Performance |
| Timeline |
| Aedas Homes SA |
| Elmos Semiconductor |
Aedas Homes and Elmos Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aedas Homes and Elmos Semiconductor
The main advantage of trading using opposite Aedas Homes and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedas Homes 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.| Aedas Homes vs. MINCO SILVER | ||
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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