Correlation Between Johnson Electric and ELMOS SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both Johnson Electric and ELMOS SEMICONDUCTOR 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 Johnson Electric and ELMOS SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Electric Holdings and ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on Johnson Electric and ELMOS SEMICONDUCTOR 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 Johnson Electric with a short position of ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Electric and ELMOS SEMICONDUCTOR.
Diversification Opportunities for Johnson Electric and ELMOS SEMICONDUCTOR
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Johnson and ELMOS is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Electric Holdings and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR and Johnson Electric 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 Johnson Electric Holdings are associated (or correlated) with ELMOS SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELMOS SEMICONDUCTOR has no effect on the direction of Johnson Electric i.e., Johnson Electric and ELMOS SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between Johnson Electric and ELMOS SEMICONDUCTOR
Assuming the 90 days trading horizon Johnson Electric Holdings is expected to under-perform the ELMOS SEMICONDUCTOR. But the stock apears to be less risky and, when comparing its historical volatility, Johnson Electric Holdings is 3.11 times less risky than ELMOS SEMICONDUCTOR. The stock trades about -0.07 of its potential returns per unit of risk. The ELMOS SEMICONDUCTOR is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,750 in ELMOS SEMICONDUCTOR on September 5, 2024 and sell it today you would earn a total of 90.00 from holding ELMOS SEMICONDUCTOR or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johnson Electric Holdings vs. ELMOS SEMICONDUCTOR
Performance |
| Timeline |
| Johnson Electric Holdings |
| ELMOS SEMICONDUCTOR |
Johnson Electric and ELMOS SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Electric and ELMOS SEMICONDUCTOR
The main advantage of trading using opposite Johnson Electric and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Electric position performs unexpectedly, ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR will offset losses from the drop in ELMOS SEMICONDUCTOR's long position.| Johnson Electric vs. ELMOS SEMICONDUCTOR | Johnson Electric vs. VIVA WINE GROUP | Johnson Electric vs. Sumitomo Mitsui Construction | Johnson Electric vs. ScanSource |
| ELMOS SEMICONDUCTOR vs. TOTAL GABON | ELMOS SEMICONDUCTOR vs. Walgreens Boots Alliance | ELMOS SEMICONDUCTOR vs. Peak Resources Limited |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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