Correlation Between ELMOS SEMICONDUCTOR and BW OFFSHORE
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and BW OFFSHORE 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 BW OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and BW OFFSHORE LTD, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and BW OFFSHORE 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 BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and BW OFFSHORE.
Diversification Opportunities for ELMOS SEMICONDUCTOR and BW OFFSHORE
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ELMOS and XY81 is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and BW OFFSHORE LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW OFFSHORE LTD 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 BW OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW OFFSHORE LTD has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and BW OFFSHORE go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and BW OFFSHORE
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 1.32 times more return on investment than BW OFFSHORE. However, ELMOS SEMICONDUCTOR is 1.32 times more volatile than BW OFFSHORE LTD. It trades about 0.08 of its potential returns per unit of risk. BW OFFSHORE LTD is currently generating about -0.09 per unit of risk. If you would invest 5,760 in ELMOS SEMICONDUCTOR on August 31, 2024 and sell it today you would earn a total of 370.00 from holding ELMOS SEMICONDUCTOR or generate 6.42% 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. BW OFFSHORE LTD
Performance |
| Timeline |
| ELMOS SEMICONDUCTOR |
| BW OFFSHORE LTD |
ELMOS SEMICONDUCTOR and BW OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELMOS SEMICONDUCTOR and BW OFFSHORE
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, BW OFFSHORE 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 BW OFFSHORE will offset losses from the drop in BW OFFSHORE's long position.| ELMOS SEMICONDUCTOR vs. Treasury Wine Estates | ELMOS SEMICONDUCTOR vs. Spirent Communications plc | ELMOS SEMICONDUCTOR vs. Calibre Mining Corp | ELMOS SEMICONDUCTOR vs. SK TELECOM TDADR |
| BW OFFSHORE vs. Schlumberger Limited | BW OFFSHORE vs. Halliburton | BW OFFSHORE vs. Tenaris SA | BW OFFSHORE vs. Superior Plus Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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