Correlation Between ELMOS SEMICONDUCTOR and ZhongAn Online

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Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and ZhongAn Online 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 ELMOS SEMICONDUCTOR and ZhongAn Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and ZhongAn Online P, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and ZhongAn Online 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 ELMOS SEMICONDUCTOR with a short position of ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and ZhongAn Online.

Diversification Opportunities for ELMOS SEMICONDUCTOR and ZhongAn Online

-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between ELMOS and ZhongAn is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P and ELMOS 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 ELMOS SEMICONDUCTOR are associated (or correlated) with ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and ZhongAn Online go up and down completely randomly.

Pair Corralation between ELMOS SEMICONDUCTOR and ZhongAn Online

Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 1.14 times more return on investment than ZhongAn Online. However, ELMOS SEMICONDUCTOR is 1.14 times more volatile than ZhongAn Online P. It trades about 0.11 of its potential returns per unit of risk. ZhongAn Online P is currently generating about -0.11 per unit of risk. If you would invest  6,610  in ELMOS SEMICONDUCTOR on October 19, 2024 and sell it today you would earn a total of  820.00  from holding ELMOS SEMICONDUCTOR or generate 12.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

ELMOS SEMICONDUCTOR  vs.  ZhongAn Online P

 Performance 
       Timeline  
ELMOS SEMICONDUCTOR 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in ELMOS SEMICONDUCTOR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, ELMOS SEMICONDUCTOR exhibited solid returns over the last few months and may actually be approaching a breakup point.
ZhongAn Online P 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ZhongAn Online P has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

ELMOS SEMICONDUCTOR and ZhongAn Online Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ELMOS SEMICONDUCTOR and ZhongAn Online

The main advantage of trading using opposite ELMOS SEMICONDUCTOR and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.
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The idea behind ELMOS SEMICONDUCTOR and ZhongAn Online P 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.
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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