Correlation Between ELMOS SEMICONDUCTOR and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and THAI BEVERAGE 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 THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and THAI BEVERAGE, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and THAI BEVERAGE 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 THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and THAI BEVERAGE.
Diversification Opportunities for ELMOS SEMICONDUCTOR and THAI BEVERAGE
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between ELMOS and THAI is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE 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 THAI BEVERAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THAI BEVERAGE has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and THAI BEVERAGE
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 1.62 times more return on investment than THAI BEVERAGE. However, ELMOS SEMICONDUCTOR is 1.62 times more volatile than THAI BEVERAGE. It trades about 0.17 of its potential returns per unit of risk. THAI BEVERAGE is currently generating about 0.01 per unit of risk. If you would invest 5,380 in ELMOS SEMICONDUCTOR on October 31, 2024 and sell it today you would earn a total of 2,020 from holding ELMOS SEMICONDUCTOR or generate 37.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ELMOS SEMICONDUCTOR vs. THAI BEVERAGE
Performance |
Timeline |
ELMOS SEMICONDUCTOR |
THAI BEVERAGE |
ELMOS SEMICONDUCTOR and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ELMOS SEMICONDUCTOR and THAI BEVERAGE
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, THAI BEVERAGE 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 THAI BEVERAGE will offset losses from the drop in THAI BEVERAGE's long position.ELMOS SEMICONDUCTOR vs. Monster Beverage Corp | ||
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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