Correlation Between Elan Microelectronics and Sigurd Microelectronics
Can any of the company-specific risk be diversified away by investing in both Elan Microelectronics and Sigurd Microelectronics 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 Sigurd Microelectronics 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 Sigurd Microelectronics Corp, you can compare the effects of market volatilities on Elan Microelectronics and Sigurd Microelectronics 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 Sigurd Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elan Microelectronics and Sigurd Microelectronics.
Diversification Opportunities for Elan Microelectronics and Sigurd Microelectronics
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Elan and Sigurd is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Elan Microelectronics Corp and Sigurd Microelectronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sigurd Microelectronics 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 Sigurd Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sigurd Microelectronics has no effect on the direction of Elan Microelectronics i.e., Elan Microelectronics and Sigurd Microelectronics go up and down completely randomly.
Pair Corralation between Elan Microelectronics and Sigurd Microelectronics
Assuming the 90 days trading horizon Elan Microelectronics Corp is expected to generate 1.57 times more return on investment than Sigurd Microelectronics. However, Elan Microelectronics is 1.57 times more volatile than Sigurd Microelectronics Corp. It trades about -0.05 of its potential returns per unit of risk. Sigurd Microelectronics Corp is currently generating about -0.23 per unit of risk. If you would invest 14,600 in Elan Microelectronics Corp on August 31, 2024 and sell it today you would lose (450.00) from holding Elan Microelectronics Corp or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elan Microelectronics Corp vs. Sigurd Microelectronics Corp
Performance |
| Timeline |
| Elan Microelectronics |
| Sigurd Microelectronics |
Elan Microelectronics and Sigurd Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elan Microelectronics and Sigurd Microelectronics
The main advantage of trading using opposite Elan Microelectronics and Sigurd Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elan Microelectronics position performs unexpectedly, Sigurd Microelectronics 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 Sigurd Microelectronics will offset losses from the drop in Sigurd Microelectronics' long position.| Elan Microelectronics vs. United Microelectronics | Elan Microelectronics vs. Winbond Electronics Corp | Elan Microelectronics vs. Macronix International Co |
| Sigurd Microelectronics vs. King Yuan Electronics | Sigurd Microelectronics vs. Powertech Technology | Sigurd Microelectronics vs. Greatek Electronics | Sigurd Microelectronics vs. Sitronix Technology 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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