Correlation Between Elmos Semiconductor and Sumitomo Rubber
Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and Sumitomo Rubber 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 Sumitomo Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elmos Semiconductor SE and Sumitomo Rubber Industries, you can compare the effects of market volatilities on Elmos Semiconductor and Sumitomo Rubber 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 Sumitomo Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and Sumitomo Rubber.
Diversification Opportunities for Elmos Semiconductor and Sumitomo Rubber
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elmos and Sumitomo is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and Sumitomo Rubber Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Rubber Indu 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 SE are associated (or correlated) with Sumitomo Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Rubber Indu has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and Sumitomo Rubber go up and down completely randomly.
Pair Corralation between Elmos Semiconductor and Sumitomo Rubber
Assuming the 90 days trading horizon Elmos Semiconductor SE is expected to generate 2.23 times more return on investment than Sumitomo Rubber. However, Elmos Semiconductor is 2.23 times more volatile than Sumitomo Rubber Industries. It trades about 0.14 of its potential returns per unit of risk. Sumitomo Rubber Industries is currently generating about 0.31 per unit of risk. If you would invest 5,460 in Elmos Semiconductor SE on August 31, 2024 and sell it today you would earn a total of 700.00 from holding Elmos Semiconductor SE or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elmos Semiconductor SE vs. Sumitomo Rubber Industries
Performance |
| Timeline |
| Elmos Semiconductor |
| Sumitomo Rubber Indu |
Elmos Semiconductor and Sumitomo Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elmos Semiconductor and Sumitomo Rubber
The main advantage of trading using opposite Elmos Semiconductor and Sumitomo Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elmos Semiconductor position performs unexpectedly, Sumitomo Rubber 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 Sumitomo Rubber will offset losses from the drop in Sumitomo Rubber's long position.| Elmos Semiconductor vs. NVIDIA | Elmos Semiconductor vs. Taiwan Semiconductor Manufacturing | Elmos Semiconductor vs. Advanced Micro Devices | Elmos Semiconductor vs. Intel |
| Sumitomo Rubber vs. FIREWEED METALS P | Sumitomo Rubber vs. Adtalem Global Education | Sumitomo Rubber vs. DeVry Education Group | Sumitomo Rubber vs. TAL Education Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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