Correlation Between ELMOS SEMICONDUCTOR and De Grey

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

By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and De Grey Mining, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and De Grey 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 De Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and De Grey.

Diversification Opportunities for ELMOS SEMICONDUCTOR and De Grey

0.22

Correlation Coefficient

ELMOS SEMICONDUCTOR  De Grey

Modest diversification

The 3 months correlation between ELMOS and DGD is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and De Grey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Grey 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 are associated (or correlated) with De Grey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Grey Mining has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and De Grey go up and down completely randomly.

Pair Corralation between ELMOS SEMICONDUCTOR and De Grey

Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 1.2 times more return on investment than De Grey. However, ELMOS SEMICONDUCTOR is 1.2 times more volatile than De Grey Mining. It trades about 0.03 of its potential returns per unit of risk. De Grey Mining is currently generating about 0.0 per unit of risk. If you would invest  6,670  in ELMOS SEMICONDUCTOR on December 11, 2024 and sell it today you would earn a total of  170.00  from holding ELMOS SEMICONDUCTOR or generate 2.55% 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.  De Grey Mining

ELMOS SEMICONDUCTOR

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ELMOS SEMICONDUCTOR are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, ELMOS SEMICONDUCTOR is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

De Grey Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days De Grey Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, De Grey is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ELMOS SEMICONDUCTOR and De Grey

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

The idea behind ELMOS SEMICONDUCTOR and De Grey 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.