Correlation Between Elmos Semiconductor and CyberAgent

Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and CyberAgent 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 CyberAgent 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 CyberAgent, you can compare the effects of market volatilities on Elmos Semiconductor and CyberAgent 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 CyberAgent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and CyberAgent.

Diversification Opportunities for Elmos Semiconductor and CyberAgent

0.53

Correlation Coefficient

Elmos Semiconductor  CyberAgent

Very weak diversification

The 3 months correlation between Elmos and CyberAgent is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and CyberAgent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberAgent 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 CyberAgent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberAgent has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and CyberAgent go up and down completely randomly.

Pair Corralation between Elmos Semiconductor and CyberAgent

Assuming the 90 days trading horizon Elmos Semiconductor SE is expected to generate 1.28 times more return on investment than CyberAgent. However, Elmos Semiconductor is 1.28 times more volatile than CyberAgent. It trades about 0.15 of its potential returns per unit of risk. CyberAgent is currently generating about -0.04 per unit of risk. If you would invest  6,500  in Elmos Semiconductor SE on October 6, 2024 and sell it today you would earn a total of  330.00  from holding Elmos Semiconductor SE or generate 5.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

Elmos Semiconductor SE  vs.  CyberAgent

Elmos Semiconductor

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Elmos Semiconductor SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Elmos Semiconductor may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CyberAgent

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CyberAgent are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CyberAgent may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Elmos Semiconductor and CyberAgent

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

The idea behind Elmos Semiconductor SE and CyberAgent 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.