Correlation Between ELMOS SEMICONDUCTOR and Sanyo Chemical
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and Sanyo Chemical 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 Sanyo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and Sanyo Chemical Industries, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and Sanyo Chemical 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 Sanyo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and Sanyo Chemical.
Diversification Opportunities for ELMOS SEMICONDUCTOR and Sanyo Chemical
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between ELMOS and Sanyo is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and Sanyo Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanyo Chemical Industries 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 Sanyo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanyo Chemical Industries has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and Sanyo Chemical go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and Sanyo Chemical
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 3.86 times more return on investment than Sanyo Chemical. However, ELMOS SEMICONDUCTOR is 3.86 times more volatile than Sanyo Chemical Industries. It trades about 0.15 of its potential returns per unit of risk. Sanyo Chemical Industries is currently generating about -0.17 per unit of risk. If you would invest 6,770 in ELMOS SEMICONDUCTOR on October 16, 2024 and sell it today you would earn a total of 640.00 from holding ELMOS SEMICONDUCTOR or generate 9.45% 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. Sanyo Chemical Industries
Performance |
| Timeline |
| ELMOS SEMICONDUCTOR |
| Sanyo Chemical Industries |
ELMOS SEMICONDUCTOR and Sanyo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELMOS SEMICONDUCTOR and Sanyo Chemical
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and Sanyo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, Sanyo Chemical 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 Sanyo Chemical will offset losses from the drop in Sanyo Chemical's long position.| ELMOS SEMICONDUCTOR vs. VITEC SOFTWARE GROUP | ELMOS SEMICONDUCTOR vs. Constellation Software | ELMOS SEMICONDUCTOR vs. Peijia Medical Limited | ELMOS SEMICONDUCTOR vs. OPERA SOFTWARE |
| Sanyo Chemical vs. Taiwan Semiconductor Manufacturing | Sanyo Chemical vs. ELMOS SEMICONDUCTOR | Sanyo Chemical vs. NXP Semiconductors NV | Sanyo Chemical vs. Sun Life Financial |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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