Correlation Between ELMOS SEMICONDUCTOR and State Bank

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

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

Diversification Opportunities for ELMOS SEMICONDUCTOR and State Bank

0.26

Correlation Coefficient

ELMOS SEMICONDUCTOR  State Bank

Modest diversification

The 3 months correlation between ELMOS and State is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank 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 State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and State Bank go up and down completely randomly.

Pair Corralation between ELMOS SEMICONDUCTOR and State Bank

Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to under-perform the State Bank. In addition to that, ELMOS SEMICONDUCTOR is 1.89 times more volatile than State Bank of. It trades about -0.04 of its total potential returns per unit of risk. State Bank of is currently generating about -0.07 per unit of volatility. If you would invest  8,850  in State Bank of on December 29, 2024 and sell it today you would lose (650.00) from holding State Bank of or give up 7.34% of portfolio value over 90 days.

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

ELMOS SEMICONDUCTOR  vs.  State Bank of

ELMOS SEMICONDUCTOR

Risk-Adjusted Performance

Very Weak

Over the last 90 days ELMOS SEMICONDUCTOR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

State Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days State Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with ELMOS SEMICONDUCTOR and State Bank

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

The idea behind ELMOS SEMICONDUCTOR and State Bank of 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.