Correlation Between Elmos Semiconductor and TAL Education
Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and TAL Education 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 TAL Education 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 TAL Education Group, you can compare the effects of market volatilities on Elmos Semiconductor and TAL Education 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 TAL Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and TAL Education.
Diversification Opportunities for Elmos Semiconductor and TAL Education
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Elmos and TAL is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and TAL Education Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAL Education Group 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 TAL Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAL Education Group has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and TAL Education go up and down completely randomly.
Pair Corralation between Elmos Semiconductor and TAL Education
Assuming the 90 days trading horizon Elmos Semiconductor SE is expected to generate 0.55 times more return on investment than TAL Education. However, Elmos Semiconductor SE is 1.82 times less risky than TAL Education. It trades about -0.45 of its potential returns per unit of risk. TAL Education Group is currently generating about -0.25 per unit of risk. If you would invest 6,660 in Elmos Semiconductor SE on January 9, 2025 and sell it today you would lose (1,680) from holding Elmos Semiconductor SE or give up 25.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elmos Semiconductor SE vs. TAL Education Group
Performance |
| Timeline |
| Elmos Semiconductor |
| TAL Education Group |
Elmos Semiconductor and TAL Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elmos Semiconductor and TAL Education
The main advantage of trading using opposite Elmos Semiconductor and TAL Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elmos Semiconductor position performs unexpectedly, TAL Education 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 TAL Education will offset losses from the drop in TAL Education's long position.| Elmos Semiconductor vs. Data3 Limited | Elmos Semiconductor vs. Zijin Mining Group | Elmos Semiconductor vs. Cass Information Systems | Elmos Semiconductor vs. CN DATANG C |
| TAL Education vs. RETAIL FOOD GROUP | TAL Education vs. COVIVIO HOTELS INH | TAL Education vs. Emperor Entertainment Hotel | TAL Education vs. PPHE HOTEL 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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