Correlation Between Elmos Semiconductor and GBS Software
Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and GBS Software 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 GBS Software 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 GBS Software AG, you can compare the effects of market volatilities on Elmos Semiconductor and GBS Software 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 GBS Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and GBS Software.
Diversification Opportunities for Elmos Semiconductor and GBS Software
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Elmos and GBS is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and GBS Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBS Software AG 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 GBS Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GBS Software AG has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and GBS Software go up and down completely randomly.
Pair Corralation between Elmos Semiconductor and GBS Software
Assuming the 90 days trading horizon Elmos Semiconductor SE is expected to under-perform the GBS Software. But the stock apears to be less risky and, when comparing its historical volatility, Elmos Semiconductor SE is 1.23 times less risky than GBS Software. The stock trades about -0.12 of its potential returns per unit of risk. The GBS Software AG is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 280.00 in GBS Software AG on November 7, 2024 and sell it today you would lose (2.00) from holding GBS Software AG or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 91.3% |
| Values | Daily Returns |
Elmos Semiconductor SE vs. GBS Software AG
Performance |
| Timeline |
| Elmos Semiconductor |
| GBS Software AG |
Elmos Semiconductor and GBS Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elmos Semiconductor and GBS Software
The main advantage of trading using opposite Elmos Semiconductor and GBS Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elmos Semiconductor position performs unexpectedly, GBS Software 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 GBS Software will offset losses from the drop in GBS Software's long position.| Elmos Semiconductor vs. ULTRA CLEAN HLDGS | Elmos Semiconductor vs. ALERION CLEANPOWER | Elmos Semiconductor vs. UPDATE SOFTWARE | Elmos Semiconductor vs. Gol Intelligent Airlines |
| GBS Software vs. SIVERS SEMICONDUCTORS AB | GBS Software vs. NorAm Drilling AS | GBS Software vs. Volkswagen AG | GBS Software vs. Darden Restaurants |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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