Correlation Between ELMOS SEMICONDUCTOR and Mastercard

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Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and Mastercard 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 Mastercard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and Mastercard, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and Mastercard 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 Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and Mastercard.

Diversification Opportunities for ELMOS SEMICONDUCTOR and Mastercard

0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between ELMOS and Mastercard is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard 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 Mastercard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastercard has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and Mastercard go up and down completely randomly.

Pair Corralation between ELMOS SEMICONDUCTOR and Mastercard

Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 1.94 times less return on investment than Mastercard. In addition to that, ELMOS SEMICONDUCTOR is 2.65 times more volatile than Mastercard. It trades about 0.02 of its total potential returns per unit of risk. Mastercard is currently generating about 0.08 per unit of volatility. If you would invest  43,426  in Mastercard on October 9, 2024 and sell it today you would earn a total of  7,694  from holding Mastercard or generate 17.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.47%
ValuesDaily Returns

ELMOS SEMICONDUCTOR  vs.  Mastercard

 Performance 
       Timeline  
ELMOS SEMICONDUCTOR 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
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.
Mastercard 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Mastercard are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Mastercard may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ELMOS SEMICONDUCTOR and Mastercard Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ELMOS SEMICONDUCTOR and Mastercard

The main advantage of trading using opposite ELMOS SEMICONDUCTOR and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, Mastercard 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 Mastercard will offset losses from the drop in Mastercard's long position.
The idea behind ELMOS SEMICONDUCTOR and Mastercard 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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