Correlation Between ELMOS SEMICONDUCTOR and Caltagirone SpA
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and Caltagirone SpA 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 Caltagirone SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and Caltagirone SpA, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and Caltagirone SpA 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 Caltagirone SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and Caltagirone SpA.
Diversification Opportunities for ELMOS SEMICONDUCTOR and Caltagirone SpA
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ELMOS and Caltagirone is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and Caltagirone SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caltagirone SpA 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 Caltagirone SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caltagirone SpA has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and Caltagirone SpA go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and Caltagirone SpA
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 2.95 times more return on investment than Caltagirone SpA. However, ELMOS SEMICONDUCTOR is 2.95 times more volatile than Caltagirone SpA. It trades about 0.21 of its potential returns per unit of risk. Caltagirone SpA is currently generating about 0.1 per unit of risk. If you would invest 6,140 in ELMOS SEMICONDUCTOR on September 25, 2024 and sell it today you would earn a total of 650.00 from holding ELMOS SEMICONDUCTOR or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELMOS SEMICONDUCTOR vs. Caltagirone SpA
Performance |
| Timeline |
| ELMOS SEMICONDUCTOR |
| Caltagirone SpA |
ELMOS SEMICONDUCTOR and Caltagirone SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELMOS SEMICONDUCTOR and Caltagirone SpA
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and Caltagirone SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, Caltagirone SpA 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 Caltagirone SpA will offset losses from the drop in Caltagirone SpA's long position.| ELMOS SEMICONDUCTOR vs. CVS Health | ELMOS SEMICONDUCTOR vs. INDOFOOD AGRI RES | ELMOS SEMICONDUCTOR vs. FEMALE HEALTH | ELMOS SEMICONDUCTOR vs. AUSTEVOLL SEAFOOD |
| Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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