Correlation Between Ihuman and Elmos Semiconductor

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

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

Diversification Opportunities for Ihuman and Elmos Semiconductor

0.0

Correlation Coefficient

Ihuman  Elmos Semiconductor

Pay attention - limited upside

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

Pair Corralation between Ihuman and Elmos Semiconductor

Allowing for the 90-day total investment horizon Ihuman Inc is expected to under-perform the Elmos Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Ihuman Inc is 1.73 times less risky than Elmos Semiconductor. The stock trades about -0.02 of its potential returns per unit of risk. The Elmos Semiconductor SE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,624  in Elmos Semiconductor SE on October 13, 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	100.0%
Values	Daily Returns

Ihuman Inc  vs.  Elmos Semiconductor SE

Ihuman Inc

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Ihuman Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Elmos Semiconductor

Risk-Adjusted Performance

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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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ihuman and Elmos Semiconductor

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

The idea behind Ihuman Inc and Elmos Semiconductor SE 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.