Correlation Between ELMOS SEMICONDUCTOR and Geratherm Medical
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and Geratherm Medical 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 Geratherm Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and Geratherm Medical AG, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and Geratherm Medical 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 Geratherm Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and Geratherm Medical.
Diversification Opportunities for ELMOS SEMICONDUCTOR and Geratherm Medical
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ELMOS and Geratherm is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm Medical 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 Geratherm Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geratherm Medical has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and Geratherm Medical go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and Geratherm Medical
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 0.9 times more return on investment than Geratherm Medical. However, ELMOS SEMICONDUCTOR is 1.12 times less risky than Geratherm Medical. It trades about 0.01 of its potential returns per unit of risk. Geratherm Medical AG is currently generating about -0.03 per unit of risk. If you would invest 6,142 in ELMOS SEMICONDUCTOR on August 24, 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 | 97.43% |
| Values | Daily Returns |
ELMOS SEMICONDUCTOR vs. Geratherm Medical AG
Performance |
| Timeline |
| ELMOS SEMICONDUCTOR |
| Geratherm Medical |
ELMOS SEMICONDUCTOR and Geratherm Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELMOS SEMICONDUCTOR and Geratherm Medical
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and Geratherm Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, Geratherm Medical 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 Geratherm Medical will offset losses from the drop in Geratherm Medical's long position.| ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc |
| Geratherm Medical vs. Align Technology | Geratherm Medical vs. Superior Plus Corp | Geratherm Medical vs. NMI Holdings | Geratherm Medical vs. Origin Agritech |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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