Correlation Between Elma Electronic and Also Holding
Can any of the company-specific risk be diversified away by investing in both Elma Electronic and Also Holding 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 Elma Electronic and Also Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elma Electronic AG and Also Holding AG, you can compare the effects of market volatilities on Elma Electronic and Also Holding 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 Elma Electronic with a short position of Also Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elma Electronic and Also Holding.
Diversification Opportunities for Elma Electronic and Also Holding
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elma and Also is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Elma Electronic AG and Also Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Also Holding AG and Elma Electronic 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 Elma Electronic AG are associated (or correlated) with Also Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Also Holding AG has no effect on the direction of Elma Electronic i.e., Elma Electronic and Also Holding go up and down completely randomly.
Pair Corralation between Elma Electronic and Also Holding
Assuming the 90 days trading horizon Elma Electronic AG is expected to generate 0.5 times more return on investment than Also Holding. However, Elma Electronic AG is 2.0 times less risky than Also Holding. It trades about 0.32 of its potential returns per unit of risk. Also Holding AG is currently generating about -0.31 per unit of risk. If you would invest 103,000 in Elma Electronic AG on August 28, 2024 and sell it today you would earn a total of 2,000 from holding Elma Electronic AG or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 23.26% |
| Values | Daily Returns |
Elma Electronic AG vs. Also Holding AG
Performance |
| Timeline |
| Elma Electronic AG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Also Holding AG |
Elma Electronic and Also Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elma Electronic and Also Holding
The main advantage of trading using opposite Elma Electronic and Also Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elma Electronic position performs unexpectedly, Also Holding 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 Also Holding will offset losses from the drop in Also Holding's long position.| Elma Electronic vs. Carlo Gavazzi Holding | Elma Electronic vs. Feintool International Holding | Elma Electronic vs. Graubuendner Kantonalbank | Elma Electronic vs. Also Holding AG |
| Also Holding vs. Hubersuhner AG | Also Holding vs. Implenia AG | Also Holding vs. Mikron Holding AG | Also Holding vs. Bucher Industries AG |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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