Correlation Between Apple and ELMOS SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and ELMOS SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on Apple 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 Apple with a short position of ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and ELMOS SEMICONDUCTOR.
Diversification Opportunities for Apple and ELMOS SEMICONDUCTOR
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and ELMOS is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR and Apple 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 Apple Inc 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 Apple i.e., Apple and ELMOS SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between Apple and ELMOS SEMICONDUCTOR
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.54 times more return on investment than ELMOS SEMICONDUCTOR. However, Apple Inc is 1.85 times less risky than ELMOS SEMICONDUCTOR. It trades about 0.05 of its potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about -0.01 per unit of risk. If you would invest 17,429 in Apple Inc on August 28, 2024 and sell it today you would earn a total of 4,511 from holding Apple Inc or generate 25.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. ELMOS SEMICONDUCTOR
Performance |
| Timeline |
| Apple Inc |
| ELMOS SEMICONDUCTOR |
Apple and ELMOS SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and ELMOS SEMICONDUCTOR
The main advantage of trading using opposite Apple and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.The idea behind Apple Inc and ELMOS SEMICONDUCTOR 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.| ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Microsoft | ELMOS SEMICONDUCTOR vs. Microsoft |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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