Correlation Between Elmos Semiconductor and Cumberland Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals, you can compare the effects of market volatilities on Elmos Semiconductor and Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and Cumberland Pharmaceuticals.
Diversification Opportunities for Elmos Semiconductor and Cumberland Pharmaceuticals
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elmos and Cumberland is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and Cumberland Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumberland Pharmaceuticals has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and Cumberland Pharmaceuticals go up and down completely randomly.
Pair Corralation between Elmos Semiconductor and Cumberland Pharmaceuticals
Assuming the 90 days horizon Elmos Semiconductor SE is expected to under-perform the Cumberland Pharmaceuticals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Elmos Semiconductor SE is 4.15 times less risky than Cumberland Pharmaceuticals. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Cumberland Pharmaceuticals is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 130.00 in Cumberland Pharmaceuticals on September 12, 2024 and sell it today you would earn a total of 114.00 from holding Cumberland Pharmaceuticals or generate 87.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elmos Semiconductor SE vs. Cumberland Pharmaceuticals
Performance |
| Timeline |
| Elmos Semiconductor |
| Cumberland Pharmaceuticals |
Elmos Semiconductor and Cumberland Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elmos Semiconductor and Cumberland Pharmaceuticals
The main advantage of trading using opposite Elmos Semiconductor and Cumberland Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elmos Semiconductor position performs unexpectedly, Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals will offset losses from the drop in Cumberland Pharmaceuticals' long position.| Elmos Semiconductor vs. Legacy Education | Elmos Semiconductor vs. Apple Inc | Elmos Semiconductor vs. NVIDIA | Elmos Semiconductor vs. Microsoft |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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