Correlation Between Elan Microelectronics and Grand Plastic
Can any of the company-specific risk be diversified away by investing in both Elan Microelectronics and Grand Plastic 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 Elan Microelectronics and Grand Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elan Microelectronics Corp and Grand Plastic Technology, you can compare the effects of market volatilities on Elan Microelectronics and Grand Plastic 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 Elan Microelectronics with a short position of Grand Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elan Microelectronics and Grand Plastic.
Diversification Opportunities for Elan Microelectronics and Grand Plastic
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elan and Grand is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Elan Microelectronics Corp and Grand Plastic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Plastic Technology and Elan Microelectronics 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 Elan Microelectronics Corp are associated (or correlated) with Grand Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Plastic Technology has no effect on the direction of Elan Microelectronics i.e., Elan Microelectronics and Grand Plastic go up and down completely randomly.
Pair Corralation between Elan Microelectronics and Grand Plastic
Assuming the 90 days trading horizon Elan Microelectronics Corp is expected to generate 0.67 times more return on investment than Grand Plastic. However, Elan Microelectronics Corp is 1.49 times less risky than Grand Plastic. It trades about 0.09 of its potential returns per unit of risk. Grand Plastic Technology is currently generating about 0.05 per unit of risk. If you would invest 15,050 in Elan Microelectronics Corp on September 13, 2024 and sell it today you would earn a total of 500.00 from holding Elan Microelectronics Corp or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elan Microelectronics Corp vs. Grand Plastic Technology
Performance |
| Timeline |
| Elan Microelectronics |
| Grand Plastic Technology |
Elan Microelectronics and Grand Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elan Microelectronics and Grand Plastic
The main advantage of trading using opposite Elan Microelectronics and Grand Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elan Microelectronics position performs unexpectedly, Grand Plastic 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 Grand Plastic will offset losses from the drop in Grand Plastic's long position.| Elan Microelectronics vs. AU Optronics | Elan Microelectronics vs. Innolux Corp | Elan Microelectronics vs. Ruentex Development Co | Elan Microelectronics vs. WiseChip Semiconductor |
| Grand Plastic vs. First Hotel Co | Grand Plastic vs. Cowealth Medical Holding | Grand Plastic vs. Formosa International Hotels | Grand Plastic vs. HOYA Resort Hotel |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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