Correlation Between Elmos Semiconductor and IMPERIAL TOBACCO
Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO 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 IMPERIAL TOBACCO , you can compare the effects of market volatilities on Elmos Semiconductor and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and IMPERIAL TOBACCO.
Diversification Opportunities for Elmos Semiconductor and IMPERIAL TOBACCO
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Elmos and IMPERIAL is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and IMPERIAL TOBACCO go up and down completely randomly.
Pair Corralation between Elmos Semiconductor and IMPERIAL TOBACCO
Assuming the 90 days trading horizon Elmos Semiconductor SE is expected to generate 3.39 times more return on investment than IMPERIAL TOBACCO. However, Elmos Semiconductor is 3.39 times more volatile than IMPERIAL TOBACCO . It trades about 0.38 of its potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about 0.0 per unit of risk. If you would invest 5,880 in Elmos Semiconductor SE on October 1, 2024 and sell it today you would earn a total of 1,020 from holding Elmos Semiconductor SE or generate 17.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elmos Semiconductor SE vs. IMPERIAL TOBACCO
Performance |
| Timeline |
| Elmos Semiconductor |
| IMPERIAL TOBACCO |
Elmos Semiconductor and IMPERIAL TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elmos Semiconductor and IMPERIAL TOBACCO
The main advantage of trading using opposite Elmos Semiconductor and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elmos Semiconductor position performs unexpectedly, IMPERIAL TOBACCO 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO's long position.| Elmos Semiconductor vs. China Resources Beer | Elmos Semiconductor vs. Molson Coors Beverage | Elmos Semiconductor vs. National Beverage Corp | Elmos Semiconductor vs. QUEEN S ROAD |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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