Correlation Between ELMOS SEMICONDUCTOR and Hua Hong
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and Hua Hong 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 Hua Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and Hua Hong Semiconductor, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and Hua Hong 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 Hua Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and Hua Hong.
Diversification Opportunities for ELMOS SEMICONDUCTOR and Hua Hong
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ELMOS and Hua is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and Hua Hong Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Hong Semiconductor 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 are associated (or correlated) with Hua Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Hong Semiconductor has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and Hua Hong go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and Hua Hong
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 1.12 times more return on investment than Hua Hong. However, ELMOS SEMICONDUCTOR is 1.12 times more volatile than Hua Hong Semiconductor. It trades about 0.18 of its potential returns per unit of risk. Hua Hong Semiconductor is currently generating about 0.2 per unit of risk. If you would invest 6,790 in ELMOS SEMICONDUCTOR on October 23, 2024 and sell it today you would earn a total of 770.00 from holding ELMOS SEMICONDUCTOR or generate 11.34% 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 vs. Hua Hong Semiconductor
Performance |
Timeline |
ELMOS SEMICONDUCTOR |
Hua Hong Semiconductor |
ELMOS SEMICONDUCTOR and Hua Hong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ELMOS SEMICONDUCTOR and Hua Hong
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and Hua Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, Hua Hong 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 Hua Hong will offset losses from the drop in Hua Hong's long position.ELMOS SEMICONDUCTOR vs. TELECOM ITALIA | ELMOS SEMICONDUCTOR vs. Xinhua Winshare Publishing | ELMOS SEMICONDUCTOR vs. Comba Telecom Systems | ELMOS SEMICONDUCTOR vs. Grand Canyon Education |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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