Correlation Between ELMOS SEMICONDUCTOR and MOUNT GIBSON
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and MOUNT GIBSON 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 MOUNT GIBSON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and MOUNT GIBSON IRON, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and MOUNT GIBSON 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 MOUNT GIBSON. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and MOUNT GIBSON.
Diversification Opportunities for ELMOS SEMICONDUCTOR and MOUNT GIBSON
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between ELMOS and MOUNT is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and MOUNT GIBSON IRON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOUNT GIBSON IRON 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 MOUNT GIBSON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOUNT GIBSON IRON has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and MOUNT GIBSON go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and MOUNT GIBSON
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to under-perform the MOUNT GIBSON. But the stock apears to be less risky and, when comparing its historical volatility, ELMOS SEMICONDUCTOR is 1.23 times less risky than MOUNT GIBSON. The stock trades about -0.28 of its potential returns per unit of risk. The MOUNT GIBSON IRON is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 17.00 in MOUNT GIBSON IRON on November 8, 2024 and sell it today you would earn a total of 1.00 from holding MOUNT GIBSON IRON or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ELMOS SEMICONDUCTOR vs. MOUNT GIBSON IRON
Performance |
| Timeline |
| ELMOS SEMICONDUCTOR |
| MOUNT GIBSON IRON |
ELMOS SEMICONDUCTOR and MOUNT GIBSON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELMOS SEMICONDUCTOR and MOUNT GIBSON
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and MOUNT GIBSON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, MOUNT GIBSON 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 MOUNT GIBSON will offset losses from the drop in MOUNT GIBSON's long position.| ELMOS SEMICONDUCTOR vs. DaChan Food Limited | ELMOS SEMICONDUCTOR vs. United Natural Foods | ELMOS SEMICONDUCTOR vs. SENECA FOODS A | ELMOS SEMICONDUCTOR vs. Chuangs China Investments |
| MOUNT GIBSON vs. Axfood AB | MOUNT GIBSON vs. Cal Maine Foods | MOUNT GIBSON vs. United Natural Foods | MOUNT GIBSON vs. OFFICE DEPOT |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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