Correlation Between POLARX and ELMOS SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both POLARX 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 POLARX and ELMOS SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POLARX LTD and ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on POLARX 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 POLARX with a short position of ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of POLARX and ELMOS SEMICONDUCTOR.
Diversification Opportunities for POLARX and ELMOS SEMICONDUCTOR
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between POLARX and ELMOS is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding POLARX LTD and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR and POLARX 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 POLARX LTD 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 POLARX i.e., POLARX and ELMOS SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between POLARX and ELMOS SEMICONDUCTOR
Assuming the 90 days horizon POLARX LTD is expected to under-perform the ELMOS SEMICONDUCTOR. In addition to that, POLARX is 7.67 times more volatile than ELMOS SEMICONDUCTOR. It trades about -0.17 of its total potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about 0.2 per unit of volatility. If you would invest 6,140 in ELMOS SEMICONDUCTOR on September 24, 2024 and sell it today you would earn a total of 650.00 from holding ELMOS SEMICONDUCTOR or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
POLARX LTD vs. ELMOS SEMICONDUCTOR
Performance |
| Timeline |
| POLARX LTD |
| ELMOS SEMICONDUCTOR |
POLARX and ELMOS SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POLARX and ELMOS SEMICONDUCTOR
The main advantage of trading using opposite POLARX and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POLARX 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.| POLARX vs. Columbia Sportswear | POLARX vs. LG Display Co | POLARX vs. British American Tobacco | POLARX vs. SBM OFFSHORE |
| ELMOS SEMICONDUCTOR vs. CVS Health | ELMOS SEMICONDUCTOR vs. INDOFOOD AGRI RES | ELMOS SEMICONDUCTOR vs. FEMALE HEALTH | ELMOS SEMICONDUCTOR vs. AUSTEVOLL SEAFOOD |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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