Correlation Between SWISS WATER and Elmos Semiconductor
Can any of the company-specific risk be diversified away by investing in both SWISS WATER 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 SWISS WATER and Elmos Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and Elmos Semiconductor SE, you can compare the effects of market volatilities on SWISS WATER 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 SWISS WATER with a short position of Elmos Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and Elmos Semiconductor.
Diversification Opportunities for SWISS WATER and Elmos Semiconductor
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SWISS and Elmos is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor and SWISS WATER 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 SWISS WATER DECAFFCOFFEE 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 SWISS WATER i.e., SWISS WATER and Elmos Semiconductor go up and down completely randomly.
Pair Corralation between SWISS WATER and Elmos Semiconductor
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to generate 0.83 times more return on investment than Elmos Semiconductor. However, SWISS WATER DECAFFCOFFEE is 1.2 times less risky than Elmos Semiconductor. It trades about -0.12 of its potential returns per unit of risk. Elmos Semiconductor SE is currently generating about -0.11 per unit of risk. If you would invest 226.00 in SWISS WATER DECAFFCOFFEE on November 28, 2024 and sell it today you would lose (12.00) from holding SWISS WATER DECAFFCOFFEE or give up 5.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. Elmos Semiconductor SE
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| Elmos Semiconductor |
SWISS WATER and Elmos Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and Elmos Semiconductor
The main advantage of trading using opposite SWISS WATER and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER 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.| SWISS WATER vs. VIENNA INSURANCE GR | SWISS WATER vs. alstria office REIT AG | SWISS WATER vs. Neinor Homes SA | SWISS WATER vs. Pets at Home |
| Elmos Semiconductor vs. Perdoceo Education | Elmos Semiconductor vs. Aegean Airlines SA | Elmos Semiconductor vs. International Consolidated Airlines | Elmos Semiconductor vs. EMBARK EDUCATION LTD |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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