Correlation Between Elmos Semiconductor and Great West

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

Diversification Opportunities for Elmos Semiconductor and Great West

-0.18

Correlation Coefficient

Elmos Semiconductor  Great West

Good diversification

The 3 months correlation between Elmos and Great is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and Great West go up and down completely randomly.

Pair Corralation between Elmos Semiconductor and Great West

Assuming the 90 days trading horizon Elmos Semiconductor SE is expected to generate 3.12 times more return on investment than Great West. However, Elmos Semiconductor is 3.12 times more volatile than Great West Lifeco. It trades about 0.13 of its potential returns per unit of risk. Great West Lifeco is currently generating about 0.01 per unit of risk. If you would invest  6,030  in Elmos Semiconductor SE on October 25, 2024 and sell it today you would earn a total of  1,600  from holding Elmos Semiconductor SE or generate 26.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Elmos Semiconductor SE  vs.  Great West Lifeco

Elmos Semiconductor

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elmos Semiconductor SE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Elmos Semiconductor unveiled solid returns over the last few months and may actually be approaching a breakup point.

Great West Lifeco

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Great West Lifeco has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Great West is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Elmos Semiconductor and Great West

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

The idea behind Elmos Semiconductor SE and Great West Lifeco 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.