Correlation Between Elmos Semiconductor and Evolution Mining

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

Diversification Opportunities for Elmos Semiconductor and Evolution Mining

0.0

Correlation Coefficient

Elmos Semiconductor  Evolution Mining

Pay attention - limited upside

The 3 months correlation between Elmos and Evolution is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and Evolution Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining 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 Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and Evolution Mining go up and down completely randomly.

Pair Corralation between Elmos Semiconductor and Evolution Mining

Assuming the 90 days horizon Elmos Semiconductor SE is expected to generate 1.81 times more return on investment than Evolution Mining. However, Elmos Semiconductor is 1.81 times more volatile than Evolution Mining. It trades about 0.06 of its potential returns per unit of risk. Evolution Mining is currently generating about 0.05 per unit of risk. If you would invest  2,624  in Elmos Semiconductor SE on October 5, 2024 and sell it today you would earn a total of  6,299  from holding Elmos Semiconductor SE or generate 240.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Elmos Semiconductor SE  vs.  Evolution Mining

Elmos Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

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

Evolution Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Evolution Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Elmos Semiconductor and Evolution Mining

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

The idea behind Elmos Semiconductor SE and Evolution Mining 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.