Correlation Between ELMOS SEMICONDUCTOR and SERI INDUSTRIAL
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and SERI INDUSTRIAL 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 SERI INDUSTRIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and SERI INDUSTRIAL EO, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and SERI INDUSTRIAL 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 SERI INDUSTRIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and SERI INDUSTRIAL.
Diversification Opportunities for ELMOS SEMICONDUCTOR and SERI INDUSTRIAL
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ELMOS and SERI is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and SERI INDUSTRIAL EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SERI INDUSTRIAL EO 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 SERI INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SERI INDUSTRIAL EO has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and SERI INDUSTRIAL go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and SERI INDUSTRIAL
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to under-perform the SERI INDUSTRIAL. But the stock apears to be less risky and, when comparing its historical volatility, ELMOS SEMICONDUCTOR is 1.53 times less risky than SERI INDUSTRIAL. The stock trades about -0.02 of its potential returns per unit of risk. The SERI INDUSTRIAL EO is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 292.00 in SERI INDUSTRIAL EO on September 3, 2024 and sell it today you would lose (4.00) from holding SERI INDUSTRIAL EO or give up 1.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELMOS SEMICONDUCTOR vs. SERI INDUSTRIAL EO
Performance |
| Timeline |
| ELMOS SEMICONDUCTOR |
| SERI INDUSTRIAL EO |
ELMOS SEMICONDUCTOR and SERI INDUSTRIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELMOS SEMICONDUCTOR and SERI INDUSTRIAL
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and SERI INDUSTRIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, SERI INDUSTRIAL 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 SERI INDUSTRIAL will offset losses from the drop in SERI INDUSTRIAL's long position.| ELMOS SEMICONDUCTOR vs. NORWEGIAN AIR SHUT | ELMOS SEMICONDUCTOR vs. Westinghouse Air Brake | ELMOS SEMICONDUCTOR vs. Norwegian Air Shuttle | ELMOS SEMICONDUCTOR vs. Perseus Mining Limited |
| SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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