Correlation Between ELMOS SEMICONDUCTOR and ONWARD MEDICAL
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and ONWARD MEDICAL 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 ONWARD MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and ONWARD MEDICAL BV, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and ONWARD MEDICAL 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 ONWARD MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and ONWARD MEDICAL.
Diversification Opportunities for ELMOS SEMICONDUCTOR and ONWARD MEDICAL
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ELMOS and ONWARD is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV 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 ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and ONWARD MEDICAL go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and ONWARD MEDICAL
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 1.89 times less return on investment than ONWARD MEDICAL. But when comparing it to its historical volatility, ELMOS SEMICONDUCTOR is 1.9 times less risky than ONWARD MEDICAL. It trades about 0.01 of its potential returns per unit of risk. ONWARD MEDICAL BV is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 600.00 in ONWARD MEDICAL BV on August 24, 2024 and sell it today you would lose (151.00) from holding ONWARD MEDICAL BV or give up 25.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELMOS SEMICONDUCTOR vs. ONWARD MEDICAL BV
Performance |
| Timeline |
| ELMOS SEMICONDUCTOR |
| ONWARD MEDICAL BV |
ELMOS SEMICONDUCTOR and ONWARD MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELMOS SEMICONDUCTOR and ONWARD MEDICAL
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and ONWARD MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, ONWARD MEDICAL 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 ONWARD MEDICAL will offset losses from the drop in ONWARD MEDICAL's long position.| ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc |
| ONWARD MEDICAL vs. Austevoll Seafood ASA | ONWARD MEDICAL vs. SENECA FOODS A | ONWARD MEDICAL vs. United Natural Foods | ONWARD MEDICAL vs. CARSALESCOM |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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