Correlation Between Associated British and Elmos Semiconductor
Can any of the company-specific risk be diversified away by investing in both Associated British 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 Associated British and Elmos Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated British Foods and Elmos Semiconductor SE, you can compare the effects of market volatilities on Associated British 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 Associated British with a short position of Elmos Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated British and Elmos Semiconductor.
Diversification Opportunities for Associated British and Elmos Semiconductor
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Associated and Elmos is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Associated British Foods and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor and Associated British 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 Associated British Foods 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 Associated British i.e., Associated British and Elmos Semiconductor go up and down completely randomly.
Pair Corralation between Associated British and Elmos Semiconductor
Assuming the 90 days trading horizon Associated British Foods is expected to generate 0.51 times more return on investment than Elmos Semiconductor. However, Associated British Foods is 1.96 times less risky than Elmos Semiconductor. It trades about 0.04 of its potential returns per unit of risk. Elmos Semiconductor SE is currently generating about 0.0 per unit of risk. If you would invest 186,013 in Associated British Foods on August 31, 2024 and sell it today you would earn a total of 32,987 from holding Associated British Foods or generate 17.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated British Foods vs. Elmos Semiconductor SE
Performance |
| Timeline |
| Associated British Foods |
| Elmos Semiconductor |
Associated British and Elmos Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated British and Elmos Semiconductor
The main advantage of trading using opposite Associated British and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated British 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.| Associated British vs. Aeorema Communications Plc | Associated British vs. British American Tobacco | Associated British vs. Induction Healthcare Group | Associated British vs. Optima Health plc |
| Elmos Semiconductor vs. Beeks Trading | Elmos Semiconductor vs. Monks Investment Trust | Elmos Semiconductor vs. Telecom Italia SpA | Elmos Semiconductor vs. Lords Grp Trading |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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