Correlation Between Elmos Semiconductor and Netflix
Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and Netflix 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 Netflix 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 Netflix, you can compare the effects of market volatilities on Elmos Semiconductor and Netflix 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 Netflix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and Netflix.
Diversification Opportunities for Elmos Semiconductor and Netflix
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elmos and Netflix is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and Netflix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netflix 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 Netflix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netflix has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and Netflix go up and down completely randomly.
Pair Corralation between Elmos Semiconductor and Netflix
Assuming the 90 days trading horizon Elmos Semiconductor is expected to generate 2.34 times less return on investment than Netflix. In addition to that, Elmos Semiconductor is 2.7 times more volatile than Netflix. It trades about 0.07 of its total potential returns per unit of risk. Netflix is currently generating about 0.45 per unit of volatility. If you would invest 70,380 in Netflix on August 30, 2024 and sell it today you would earn a total of 12,910 from holding Netflix or generate 18.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elmos Semiconductor SE vs. Netflix
Performance |
| Timeline |
| Elmos Semiconductor |
| Netflix |
Elmos Semiconductor and Netflix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elmos Semiconductor and Netflix
The main advantage of trading using opposite Elmos Semiconductor and Netflix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elmos Semiconductor position performs unexpectedly, Netflix 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 Netflix will offset losses from the drop in Netflix's long position.| Elmos Semiconductor vs. NVIDIA | Elmos Semiconductor vs. Texas Instruments Incorporated | Elmos Semiconductor vs. Advanced Micro Devices | Elmos Semiconductor vs. Advanced Micro Devices |
| Netflix vs. ABO GROUP ENVIRONMENT | Netflix vs. United States Steel | Netflix vs. HF FOODS GRP | Netflix vs. United Natural Foods |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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