Correlation Between Elmos Semiconductor and AUST AGRICULTURAL

Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and AUST AGRICULTURAL 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 AUST AGRICULTURAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Elmos Semiconductor SE and AUST AGRICULTURAL, you can compare the effects of market volatilities on Elmos Semiconductor and AUST AGRICULTURAL 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 AUST AGRICULTURAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and AUST AGRICULTURAL.

Diversification Opportunities for Elmos Semiconductor and AUST AGRICULTURAL

-0.59

Correlation Coefficient

Elmos Semiconductor  AUST AGRICULTURAL

Excellent diversification

The 3 months correlation between Elmos and AUST is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and AUST AGRICULTURAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUST AGRICULTURAL 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 SE are associated (or correlated) with AUST AGRICULTURAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUST AGRICULTURAL has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and AUST AGRICULTURAL go up and down completely randomly.

Pair Corralation between Elmos Semiconductor and AUST AGRICULTURAL

Assuming the 90 days trading horizon Elmos Semiconductor SE is expected to under-perform the AUST AGRICULTURAL. In addition to that, Elmos Semiconductor is 2.08 times more volatile than AUST AGRICULTURAL. It trades about -0.05 of its total potential returns per unit of risk. AUST AGRICULTURAL is currently generating about 0.03 per unit of volatility. If you would invest  82.00  in AUST AGRICULTURAL on December 30, 2024 and sell it today you would earn a total of  2.00  from holding AUST AGRICULTURAL or generate 2.44% return on investment over 90 days.

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

Elmos Semiconductor SE  vs.  AUST AGRICULTURAL

Elmos Semiconductor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Elmos Semiconductor SE 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 stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

AUST AGRICULTURAL

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AUST AGRICULTURAL are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AUST AGRICULTURAL is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Elmos Semiconductor and AUST AGRICULTURAL

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

The idea behind Elmos Semiconductor SE and AUST AGRICULTURAL 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..