Correlation Between Astral Foods and Elmos Semiconductor

Can any of the company-specific risk be diversified away by investing in both Astral Foods 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 Astral Foods and Elmos Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Astral Foods Limited and Elmos Semiconductor SE, you can compare the effects of market volatilities on Astral Foods 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 Astral Foods with a short position of Elmos Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and Elmos Semiconductor.

Diversification Opportunities for Astral Foods and Elmos Semiconductor

1.0

Correlation Coefficient

Astral Foods  Elmos Semiconductor

No risk reduction

The 3 months correlation between Astral and Elmos is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor and Astral Foods 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 Astral Foods Limited 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 Astral Foods i.e., Astral Foods and Elmos Semiconductor go up and down completely randomly.

Pair Corralation between Astral Foods and Elmos Semiconductor

Assuming the 90 days horizon Astral Foods Limited is expected to under-perform the Elmos Semiconductor. But the pink sheet apears to be less risky and, when comparing its historical volatility, Astral Foods Limited is 5.16 times less risky than Elmos Semiconductor. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Elmos Semiconductor SE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,624  in Elmos Semiconductor SE on October 10, 2024 and sell it today you would earn a total of  6,299  from holding Elmos Semiconductor SE or generate 240.05% return on investment over 90 days.

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

Astral Foods Limited  vs.  Elmos Semiconductor SE

Astral Foods Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astral Foods Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Astral Foods is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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. Despite nearly stable basic indicators, Elmos Semiconductor is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Astral Foods and Elmos Semiconductor

The main advantage of trading using opposite Astral Foods and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods 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 Astral Foods Limited 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.