Correlation Between Elmos Semiconductor and Beeks Trading

Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and Beeks Trading 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 Beeks Trading 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 Beeks Trading, you can compare the effects of market volatilities on Elmos Semiconductor and Beeks Trading 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 Beeks Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and Beeks Trading.

Diversification Opportunities for Elmos Semiconductor and Beeks Trading

0.15

Correlation Coefficient

Elmos Semiconductor  Beeks Trading

Average diversification

The 3 months correlation between Elmos and Beeks is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading 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 Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and Beeks Trading go up and down completely randomly.

Pair Corralation between Elmos Semiconductor and Beeks Trading

Assuming the 90 days trading horizon Elmos Semiconductor is expected to generate 3.66 times less return on investment than Beeks Trading. But when comparing it to its historical volatility, Elmos Semiconductor SE is 1.06 times less risky than Beeks Trading. It trades about 0.02 of its potential returns per unit of risk. Beeks Trading is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  14,600  in Beeks Trading on September 3, 2024 and sell it today you would earn a total of  12,400  from holding Beeks Trading or generate 84.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Elmos Semiconductor SE  vs.  Beeks Trading

Elmos Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elmos Semiconductor SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Beeks Trading

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Beeks Trading are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Beeks Trading is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Elmos Semiconductor and Beeks Trading

The main advantage of trading using opposite Elmos Semiconductor and Beeks Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elmos Semiconductor position performs unexpectedly, Beeks Trading 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 Beeks Trading will offset losses from the drop in Beeks Trading's long position.

The idea behind Elmos Semiconductor SE and Beeks Trading 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.