Correlation Between Elmos Semiconductor and Griffin Mining

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

Diversification Opportunities for Elmos Semiconductor and Griffin Mining

0.07

Correlation Coefficient

Elmos Semiconductor  Griffin Mining

Significant diversification

The 3 months correlation between Elmos and Griffin is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and Griffin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin Mining 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 Griffin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffin Mining has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and Griffin Mining go up and down completely randomly.

Pair Corralation between Elmos Semiconductor and Griffin Mining

Assuming the 90 days trading horizon Elmos Semiconductor is expected to generate 13.01 times less return on investment than Griffin Mining. In addition to that, Elmos Semiconductor is 1.06 times more volatile than Griffin Mining. It trades about 0.01 of its total potential returns per unit of risk. Griffin Mining is currently generating about 0.19 per unit of volatility. If you would invest  15,100  in Griffin Mining on December 2, 2024 and sell it today you would earn a total of  3,600  from holding Griffin Mining or generate 23.84% 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.  Griffin Mining

Elmos Semiconductor

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elmos Semiconductor SE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Elmos Semiconductor unveiled solid returns over the last few months and may actually be approaching a breakup point.

Griffin Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Griffin Mining 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, Griffin Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elmos Semiconductor and Griffin Mining

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

The idea behind Elmos Semiconductor SE and Griffin Mining 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.