Correlation Between Aqua Metals and ELMOS SEMICONDUCTOR

Can any of the company-specific risk be diversified away by investing in both Aqua Metals 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 Aqua Metals and ELMOS SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aqua Metals and ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on Aqua Metals 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 Aqua Metals with a short position of ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqua Metals and ELMOS SEMICONDUCTOR.

Diversification Opportunities for Aqua Metals and ELMOS SEMICONDUCTOR

-0.22

Correlation Coefficient

Aqua Metals  ELMOS SEMICONDUCTOR

Very good diversification

The 3 months correlation between Aqua and ELMOS is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Aqua Metals and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR and Aqua Metals 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 Aqua Metals 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 Aqua Metals i.e., Aqua Metals and ELMOS SEMICONDUCTOR go up and down completely randomly.

Pair Corralation between Aqua Metals and ELMOS SEMICONDUCTOR

If you would invest  6,590  in ELMOS SEMICONDUCTOR on October 9, 2024 and sell it today you would earn a total of  940.00  from holding ELMOS SEMICONDUCTOR or generate 14.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.24%
Values	Daily Returns

Aqua Metals  vs.  ELMOS SEMICONDUCTOR

Aqua Metals

Risk-Adjusted Performance

0 of 100

Very Weak

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

ELMOS SEMICONDUCTOR

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ELMOS SEMICONDUCTOR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, ELMOS SEMICONDUCTOR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aqua Metals and ELMOS SEMICONDUCTOR

The main advantage of trading using opposite Aqua Metals and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqua Metals 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 Aqua Metals and ELMOS SEMICONDUCTOR 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.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.