Correlation Between Elmos Semiconductor and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and Summit Hotel 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 Summit Hotel 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 Summit Hotel Properties, you can compare the effects of market volatilities on Elmos Semiconductor and Summit Hotel 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 Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and Summit Hotel.
Diversification Opportunities for Elmos Semiconductor and Summit Hotel
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elmos and Summit is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and Summit Hotel Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Hotel Properties 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 Summit Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Hotel Properties has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and Summit Hotel go up and down completely randomly.
Pair Corralation between Elmos Semiconductor and Summit Hotel
Assuming the 90 days trading horizon Elmos Semiconductor SE is expected to generate 1.87 times more return on investment than Summit Hotel. However, Elmos Semiconductor is 1.87 times more volatile than Summit Hotel Properties. It trades about 0.21 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about -0.08 per unit of risk. If you would invest 6,900 in Elmos Semiconductor SE on October 25, 2024 and sell it today you would earn a total of 730.00 from holding Elmos Semiconductor SE or generate 10.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elmos Semiconductor SE vs. Summit Hotel Properties
Performance |
| Timeline |
| Elmos Semiconductor |
| Summit Hotel Properties |
Elmos Semiconductor and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elmos Semiconductor and Summit Hotel
The main advantage of trading using opposite Elmos Semiconductor and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elmos Semiconductor position performs unexpectedly, Summit Hotel 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 Summit Hotel will offset losses from the drop in Summit Hotel's long position.| Elmos Semiconductor vs. Nippon Steel | Elmos Semiconductor vs. RELIANCE STEEL AL | Elmos Semiconductor vs. Monster Beverage Corp | Elmos Semiconductor vs. BlueScope Steel Limited |
| Summit Hotel vs. Tyson Foods | Summit Hotel vs. FARM 51 GROUP | Summit Hotel vs. CN MODERN DAIRY | Summit Hotel vs. PATTIES 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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