Correlation Between ELMOS SEMICONDUCTOR and Air New
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and Air New 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 New 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 New Zealand, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and Air New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and Air New.
Diversification Opportunities for ELMOS SEMICONDUCTOR and Air New
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ELMOS and Air is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and Air New Zealand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air New Zealand 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air New Zealand has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and Air New go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and Air New
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 1.61 times more return on investment than Air New. However, ELMOS SEMICONDUCTOR is 1.61 times more volatile than Air New Zealand. It trades about 0.0 of its potential returns per unit of risk. Air New Zealand is currently generating about -0.01 per unit of risk. If you would invest 6,805 in ELMOS SEMICONDUCTOR on September 1, 2024 and sell it today you would lose (695.00) from holding ELMOS SEMICONDUCTOR or give up 10.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELMOS SEMICONDUCTOR vs. Air New Zealand
Performance |
| Timeline |
| ELMOS SEMICONDUCTOR |
| Air New Zealand |
ELMOS SEMICONDUCTOR and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELMOS SEMICONDUCTOR and Air New
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, Air New 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 New will offset losses from the drop in Air New's long position.| ELMOS SEMICONDUCTOR vs. SIVERS SEMICONDUCTORS AB | ELMOS SEMICONDUCTOR vs. Darden Restaurants | ELMOS SEMICONDUCTOR vs. Reliance Steel Aluminum | ELMOS SEMICONDUCTOR vs. Q2M Managementberatung AG |
| Air New vs. SIVERS SEMICONDUCTORS AB | Air New vs. Darden Restaurants | Air New vs. Reliance Steel Aluminum | Air New vs. Q2M Managementberatung AG |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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