Correlation Between Stepan and Elmos Semiconductor
Can any of the company-specific risk be diversified away by investing in both Stepan 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 Stepan and Elmos Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and Elmos Semiconductor SE, you can compare the effects of market volatilities on Stepan 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 Stepan with a short position of Elmos Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and Elmos Semiconductor.
Diversification Opportunities for Stepan and Elmos Semiconductor
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stepan and Elmos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor and Stepan 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 Stepan Company 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 Stepan i.e., Stepan and Elmos Semiconductor go up and down completely randomly.
Pair Corralation between Stepan and Elmos Semiconductor
If you would invest 7,246 in Stepan Company on September 3, 2024 and sell it today you would earn a total of 444.00 from holding Stepan Company or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepan Company vs. Elmos Semiconductor SE
Performance |
| Timeline |
| Stepan Company |
| Elmos Semiconductor |
Stepan and Elmos Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and Elmos Semiconductor
The main advantage of trading using opposite Stepan and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan 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.The idea behind Stepan Company and Elmos Semiconductor SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Stocks Directory module to find actively traded stocks across global markets.
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