Correlation Between ELMOS SEMICONDUCTOR and INDOFOOD AGRI
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and INDOFOOD AGRI 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 INDOFOOD AGRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and INDOFOOD AGRI RES, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and INDOFOOD AGRI 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 INDOFOOD AGRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and INDOFOOD AGRI.
Diversification Opportunities for ELMOS SEMICONDUCTOR and INDOFOOD AGRI
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ELMOS and INDOFOOD is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and INDOFOOD AGRI RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDOFOOD AGRI RES 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 INDOFOOD AGRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDOFOOD AGRI RES has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and INDOFOOD AGRI go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and INDOFOOD AGRI
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 1.32 times more return on investment than INDOFOOD AGRI. However, ELMOS SEMICONDUCTOR is 1.32 times more volatile than INDOFOOD AGRI RES. It trades about 0.02 of its potential returns per unit of risk. INDOFOOD AGRI RES is currently generating about 0.03 per unit of risk. If you would invest 5,673 in ELMOS SEMICONDUCTOR on September 12, 2024 and sell it today you would earn a total of 887.00 from holding ELMOS SEMICONDUCTOR or generate 15.64% 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. INDOFOOD AGRI RES
Performance |
| Timeline |
| ELMOS SEMICONDUCTOR |
| INDOFOOD AGRI RES |
ELMOS SEMICONDUCTOR and INDOFOOD AGRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELMOS SEMICONDUCTOR and INDOFOOD AGRI
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and INDOFOOD AGRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, INDOFOOD AGRI 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 INDOFOOD AGRI will offset losses from the drop in INDOFOOD AGRI's long position.| ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc |
| INDOFOOD AGRI vs. SOFI TECHNOLOGIES | INDOFOOD AGRI vs. GLG LIFE TECH | INDOFOOD AGRI vs. RCM TECHNOLOGIES | INDOFOOD AGRI vs. Amkor Technology |
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 Stocks Directory module to find actively traded stocks across global markets.
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