Correlation Between ELMOS SEMICONDUCTOR and Bank of China
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and Bank of China 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 Bank of China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and Bank of China, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and Bank of China 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 Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and Bank of China.
Diversification Opportunities for ELMOS SEMICONDUCTOR and Bank of China
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ELMOS and Bank is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and Bank of China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of China 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 Bank of China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of China has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and Bank of China go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and Bank of China
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 1.3 times more return on investment than Bank of China. However, ELMOS SEMICONDUCTOR is 1.3 times more volatile than Bank of China. It trades about 0.09 of its potential returns per unit of risk. Bank of China is currently generating about 0.09 per unit of risk. If you would invest 6,290 in ELMOS SEMICONDUCTOR on September 13, 2024 and sell it today you would earn a total of 330.00 from holding ELMOS SEMICONDUCTOR or generate 5.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELMOS SEMICONDUCTOR vs. Bank of China
Performance |
| Timeline |
| ELMOS SEMICONDUCTOR |
| Bank of China |
ELMOS SEMICONDUCTOR and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELMOS SEMICONDUCTOR and Bank of China
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, Bank of China 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 Bank of China will offset losses from the drop in Bank of China's long position.| ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc |
| Bank of China vs. Agricultural Bank of | Bank of China vs. Commonwealth Bank of | Bank of China vs. Superior Plus Corp | Bank of China vs. SIVERS SEMICONDUCTORS AB |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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