Correlation Between Elmos Semiconductor and Centaur Media

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

Diversification Opportunities for Elmos Semiconductor and Centaur Media

0.39

Correlation Coefficient

Elmos Semiconductor  Centaur Media

Weak diversification

The 3 months correlation between Elmos and Centaur is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media 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 Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and Centaur Media go up and down completely randomly.

Pair Corralation between Elmos Semiconductor and Centaur Media

Assuming the 90 days trading horizon Elmos Semiconductor SE is expected to generate 1.1 times more return on investment than Centaur Media. However, Elmos Semiconductor is 1.1 times more volatile than Centaur Media. It trades about 0.02 of its potential returns per unit of risk. Centaur Media is currently generating about -0.02 per unit of risk. If you would invest  6,701  in Elmos Semiconductor SE on October 25, 2024 and sell it today you would earn a total of  959.00  from holding Elmos Semiconductor SE or generate 14.31% return on investment over 90 days.

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

Elmos Semiconductor SE  vs.  Centaur Media

Elmos Semiconductor

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elmos Semiconductor SE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Elmos Semiconductor unveiled solid returns over the last few months and may actually be approaching a breakup point.

Centaur Media

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Centaur Media are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Centaur Media exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elmos Semiconductor and Centaur Media

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

The idea behind Elmos Semiconductor SE and Centaur Media 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.