Correlation Between Elan Microelectronics and In Win
Can any of the company-specific risk be diversified away by investing in both Elan Microelectronics and In Win 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 In Win 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 In Win Development, you can compare the effects of market volatilities on Elan Microelectronics and In Win 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 In Win. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elan Microelectronics and In Win.
Diversification Opportunities for Elan Microelectronics and In Win
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Elan and 6117 is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Elan Microelectronics Corp and In Win Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on In Win Development 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 In Win. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of In Win Development has no effect on the direction of Elan Microelectronics i.e., Elan Microelectronics and In Win go up and down completely randomly.
Pair Corralation between Elan Microelectronics and In Win
Assuming the 90 days trading horizon Elan Microelectronics Corp is expected to generate 0.53 times more return on investment than In Win. However, Elan Microelectronics Corp is 1.87 times less risky than In Win. It trades about -0.04 of its potential returns per unit of risk. In Win Development is currently generating about -0.07 per unit of risk. If you would invest 16,350 in Elan Microelectronics Corp on September 1, 2024 and sell it today you would lose (1,700) from holding Elan Microelectronics Corp or give up 10.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Elan Microelectronics Corp vs. In Win Development
Performance |
| Timeline |
| Elan Microelectronics |
| In Win Development |
Elan Microelectronics and In Win Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elan Microelectronics and In Win
The main advantage of trading using opposite Elan Microelectronics and In Win positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elan Microelectronics position performs unexpectedly, In Win 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 In Win will offset losses from the drop in In Win's long position.The idea behind Elan Microelectronics Corp and In Win Development pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |