Correlation Between ELMOS SEMICONDUCTOR and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and AIR PRODCHEMICALS, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and AIR PRODCHEMICALS.
Diversification Opportunities for ELMOS SEMICONDUCTOR and AIR PRODCHEMICALS
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ELMOS and AIR is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and AIR PRODCHEMICALS
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 1.73 times more return on investment than AIR PRODCHEMICALS. However, ELMOS SEMICONDUCTOR is 1.73 times more volatile than AIR PRODCHEMICALS. It trades about 0.01 of its potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about 0.02 per unit of risk. If you would invest 6,064 in ELMOS SEMICONDUCTOR on August 28, 2024 and sell it today you would earn a total of 76.00 from holding ELMOS SEMICONDUCTOR or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELMOS SEMICONDUCTOR vs. AIR PRODCHEMICALS
Performance |
| Timeline |
| ELMOS SEMICONDUCTOR |
| AIR PRODCHEMICALS |
ELMOS SEMICONDUCTOR and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELMOS SEMICONDUCTOR and AIR PRODCHEMICALS
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.| ELMOS SEMICONDUCTOR vs. Computershare Limited | ELMOS SEMICONDUCTOR vs. The Home Depot | ELMOS SEMICONDUCTOR vs. INVITATION HOMES DL | ELMOS SEMICONDUCTOR vs. MI Homes |
| AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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