Correlation Between ALGOMA STEEL and ELMOS SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both ALGOMA STEEL 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 ALGOMA STEEL and ELMOS SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALGOMA STEEL GROUP and ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on ALGOMA STEEL 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 ALGOMA STEEL with a short position of ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALGOMA STEEL and ELMOS SEMICONDUCTOR.
Diversification Opportunities for ALGOMA STEEL and ELMOS SEMICONDUCTOR
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ALGOMA and ELMOS is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ALGOMA STEEL GROUP and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR and ALGOMA STEEL 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 ALGOMA STEEL GROUP 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 ALGOMA STEEL i.e., ALGOMA STEEL and ELMOS SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between ALGOMA STEEL and ELMOS SEMICONDUCTOR
Assuming the 90 days horizon ALGOMA STEEL GROUP is expected to generate 0.86 times more return on investment than ELMOS SEMICONDUCTOR. However, ALGOMA STEEL GROUP is 1.16 times less risky than ELMOS SEMICONDUCTOR. It trades about 0.07 of its potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about -0.02 per unit of risk. If you would invest 732.00 in ALGOMA STEEL GROUP on September 4, 2024 and sell it today you would earn a total of 278.00 from holding ALGOMA STEEL GROUP or generate 37.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALGOMA STEEL GROUP vs. ELMOS SEMICONDUCTOR
Performance |
| Timeline |
| ALGOMA STEEL GROUP |
| ELMOS SEMICONDUCTOR |
ALGOMA STEEL and ELMOS SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALGOMA STEEL and ELMOS SEMICONDUCTOR
The main advantage of trading using opposite ALGOMA STEEL and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALGOMA STEEL 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.| ALGOMA STEEL vs. United States Steel | ALGOMA STEEL vs. METHODE ELECTRONICS | ALGOMA STEEL vs. COSMOSTEEL HLDGS | ALGOMA STEEL vs. Caltagirone SpA |
| ELMOS SEMICONDUCTOR vs. TOTAL GABON | ELMOS SEMICONDUCTOR vs. Walgreens Boots Alliance | ELMOS SEMICONDUCTOR vs. Peak Resources Limited |
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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