Correlation Between Elmos Semiconductor and Aptiv PLC
Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and Aptiv PLC 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 Aptiv PLC 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 Aptiv PLC, you can compare the effects of market volatilities on Elmos Semiconductor and Aptiv PLC 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 Aptiv PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and Aptiv PLC.
Diversification Opportunities for Elmos Semiconductor and Aptiv PLC
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elmos and Aptiv is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and Aptiv PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptiv PLC 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 Aptiv PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptiv PLC has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and Aptiv PLC go up and down completely randomly.
Pair Corralation between Elmos Semiconductor and Aptiv PLC
Assuming the 90 days trading horizon Elmos Semiconductor SE is expected to under-perform the Aptiv PLC. In addition to that, Elmos Semiconductor is 1.02 times more volatile than Aptiv PLC. It trades about -0.07 of its total potential returns per unit of risk. Aptiv PLC is currently generating about 0.12 per unit of volatility. If you would invest 6,120 in Aptiv PLC on November 29, 2024 and sell it today you would earn a total of 230.00 from holding Aptiv PLC or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 68.18% |
| Values | Daily Returns |
Elmos Semiconductor SE vs. Aptiv PLC
Performance |
| Timeline |
| Elmos Semiconductor |
| Aptiv PLC |
Risk-Adjusted Performance
Solid
Weak | Strong |
Elmos Semiconductor and Aptiv PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elmos Semiconductor and Aptiv PLC
The main advantage of trading using opposite Elmos Semiconductor and Aptiv PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elmos Semiconductor position performs unexpectedly, Aptiv PLC 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 Aptiv PLC will offset losses from the drop in Aptiv PLC's long position.| Elmos Semiconductor vs. Perdoceo Education | Elmos Semiconductor vs. Aegean Airlines SA | Elmos Semiconductor vs. International Consolidated Airlines | Elmos Semiconductor vs. EMBARK EDUCATION LTD |
| Aptiv PLC vs. Transport International Holdings | Aptiv PLC vs. WILLIS LEASE FIN | Aptiv PLC vs. Sixt Leasing SE | Aptiv PLC vs. Liberty Broadband |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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