Correlation Between Lifeway Foods and ELMOS SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods 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 Lifeway Foods and ELMOS SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on Lifeway Foods 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 Lifeway Foods with a short position of ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and ELMOS SEMICONDUCTOR.
Diversification Opportunities for Lifeway Foods and ELMOS SEMICONDUCTOR
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lifeway and ELMOS is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR and Lifeway Foods 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 Lifeway Foods 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 Lifeway Foods i.e., Lifeway Foods and ELMOS SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between Lifeway Foods and ELMOS SEMICONDUCTOR
Assuming the 90 days horizon Lifeway Foods is expected to under-perform the ELMOS SEMICONDUCTOR. But the stock apears to be less risky and, when comparing its historical volatility, Lifeway Foods is 1.31 times less risky than ELMOS SEMICONDUCTOR. The stock trades about -0.12 of its potential returns per unit of risk. The ELMOS SEMICONDUCTOR is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 6,140 in ELMOS SEMICONDUCTOR on September 25, 2024 and sell it today you would earn a total of 650.00 from holding ELMOS SEMICONDUCTOR or generate 10.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lifeway Foods vs. ELMOS SEMICONDUCTOR
Performance |
Timeline |
Lifeway Foods |
ELMOS SEMICONDUCTOR |
Lifeway Foods and ELMOS SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lifeway Foods and ELMOS SEMICONDUCTOR
The main advantage of trading using opposite Lifeway Foods and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods 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.Lifeway Foods vs. Mowi ASA | Lifeway Foods vs. LEROY SEAFOOD GRUNSPADR | Lifeway Foods vs. Lery Seafood Group | Lifeway Foods vs. Nisshin Seifun Group |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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