Correlation Between Elmos Semiconductor and ASPEN TECHINC

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

Diversification Opportunities for Elmos Semiconductor and ASPEN TECHINC

-0.06

Correlation Coefficient

Elmos Semiconductor  ASPEN TECHINC

Good diversification

The 3 months correlation between Elmos and ASPEN is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and ASPEN TECHINC DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASPEN TECHINC DL 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 ASPEN TECHINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASPEN TECHINC DL has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and ASPEN TECHINC go up and down completely randomly.

Pair Corralation between Elmos Semiconductor and ASPEN TECHINC

Assuming the 90 days trading horizon Elmos Semiconductor SE is expected to generate 2.53 times more return on investment than ASPEN TECHINC. However, Elmos Semiconductor is 2.53 times more volatile than ASPEN TECHINC DL. It trades about 0.01 of its potential returns per unit of risk. ASPEN TECHINC DL is currently generating about 0.03 per unit of risk. If you would invest  6,660  in Elmos Semiconductor SE on December 21, 2024 and sell it today you would lose (10.00) from holding Elmos Semiconductor SE or give up 0.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.53%
Values	Daily Returns

Elmos Semiconductor SE  vs.  ASPEN TECHINC DL

Elmos Semiconductor

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Elmos Semiconductor SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Elmos Semiconductor is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

ASPEN TECHINC DL

Risk-Adjusted Performance

Weak

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

Pair Trading with Elmos Semiconductor and ASPEN TECHINC

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

The idea behind Elmos Semiconductor SE and ASPEN TECHINC DL 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.