Correlation Between Elite Semiconductor and Progate
Can any of the company-specific risk be diversified away by investing in both Elite Semiconductor and Progate 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 Elite Semiconductor and Progate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elite Semiconductor Memory and Progate Group, you can compare the effects of market volatilities on Elite Semiconductor and Progate 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 Elite Semiconductor with a short position of Progate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Semiconductor and Progate.
Diversification Opportunities for Elite Semiconductor and Progate
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Elite and Progate is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Elite Semiconductor Memory and Progate Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progate Group and Elite Semiconductor 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 Elite Semiconductor Memory are associated (or correlated) with Progate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progate Group has no effect on the direction of Elite Semiconductor i.e., Elite Semiconductor and Progate go up and down completely randomly.
Pair Corralation between Elite Semiconductor and Progate
Assuming the 90 days trading horizon Elite Semiconductor Memory is expected to generate 0.71 times more return on investment than Progate. However, Elite Semiconductor Memory is 1.42 times less risky than Progate. It trades about -0.19 of its potential returns per unit of risk. Progate Group is currently generating about -0.14 per unit of risk. If you would invest 6,810 in Elite Semiconductor Memory on September 1, 2024 and sell it today you would lose (590.00) from holding Elite Semiconductor Memory or give up 8.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elite Semiconductor Memory vs. Progate Group
Performance |
| Timeline |
| Elite Semiconductor |
| Progate Group |
Elite Semiconductor and Progate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elite Semiconductor and Progate
The main advantage of trading using opposite Elite Semiconductor and Progate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elite Semiconductor position performs unexpectedly, Progate 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 Progate will offset losses from the drop in Progate's long position.The idea behind Elite Semiconductor Memory and Progate Group 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.
| Progate vs. Niko Semiconductor Co | Progate vs. WIN Semiconductors | Progate vs. Sheng Yu Steel | Progate vs. Elite Semiconductor Memory |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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