Correlation Between ELMOS SEMICONDUCTOR and Carmat SA
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and Carmat SA 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 Carmat SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and Carmat SA, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and Carmat SA 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 Carmat SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and Carmat SA.
Diversification Opportunities for ELMOS SEMICONDUCTOR and Carmat SA
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ELMOS and Carmat is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and Carmat SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carmat SA 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 Carmat SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carmat SA has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and Carmat SA go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and Carmat SA
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 0.45 times more return on investment than Carmat SA. However, ELMOS SEMICONDUCTOR is 2.21 times less risky than Carmat SA. It trades about 0.01 of its potential returns per unit of risk. Carmat SA is currently generating about -0.05 per unit of risk. If you would invest 6,142 in ELMOS SEMICONDUCTOR on August 25, 2024 and sell it today you would earn a total of 38.00 from holding ELMOS SEMICONDUCTOR or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELMOS SEMICONDUCTOR vs. Carmat SA
Performance |
| Timeline |
| ELMOS SEMICONDUCTOR |
| Carmat SA |
ELMOS SEMICONDUCTOR and Carmat SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELMOS SEMICONDUCTOR and Carmat SA
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and Carmat SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, Carmat SA 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 Carmat SA will offset losses from the drop in Carmat SA's long position.| ELMOS SEMICONDUCTOR vs. Major Drilling Group | ELMOS SEMICONDUCTOR vs. International Consolidated Airlines | ELMOS SEMICONDUCTOR vs. Cleanaway Waste Management | ELMOS SEMICONDUCTOR vs. CVW CLEANTECH INC |
| Carmat SA vs. MI Homes | Carmat SA vs. ELMOS SEMICONDUCTOR | Carmat SA vs. Autohome ADR | Carmat SA vs. UNIVERSAL MUSIC GROUP |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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