Correlation Between ELMOS SEMICONDUCTOR and AIB Group
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and AIB Group 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 AIB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and AIB Group plc, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and AIB Group 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 AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and AIB Group.
Diversification Opportunities for ELMOS SEMICONDUCTOR and AIB Group
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ELMOS and AIB is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and AIB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIB Group plc 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 AIB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIB Group plc has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and AIB Group go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and AIB Group
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 1.35 times more return on investment than AIB Group. However, ELMOS SEMICONDUCTOR is 1.35 times more volatile than AIB Group plc. It trades about 0.08 of its potential returns per unit of risk. AIB Group plc is currently generating about 0.0 per unit of risk. If you would invest 6,260 in ELMOS SEMICONDUCTOR on September 12, 2024 and sell it today you would earn a total of 300.00 from holding ELMOS SEMICONDUCTOR or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELMOS SEMICONDUCTOR vs. AIB Group plc
Performance |
| Timeline |
| ELMOS SEMICONDUCTOR |
| AIB Group plc |
ELMOS SEMICONDUCTOR and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELMOS SEMICONDUCTOR and AIB Group
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, AIB Group 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 AIB Group will offset losses from the drop in AIB Group's long position.| ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc |
| AIB Group vs. Regions Financial | AIB Group vs. JSC Halyk bank | AIB Group vs. Harmony Gold Mining | AIB Group vs. ELMOS SEMICONDUCTOR |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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