Correlation Between Triad Group and Elmos Semiconductor

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

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

Diversification Opportunities for Triad Group and Elmos Semiconductor

-0.38

Correlation Coefficient

Triad Group  Elmos Semiconductor

Very good diversification

The 3 months correlation between Triad and Elmos is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Triad Group PLC and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor and Triad Group 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 Triad Group PLC 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 Triad Group i.e., Triad Group and Elmos Semiconductor go up and down completely randomly.

Pair Corralation between Triad Group and Elmos Semiconductor

Assuming the 90 days trading horizon Triad Group PLC is expected to generate 0.8 times more return on investment than Elmos Semiconductor. However, Triad Group PLC is 1.24 times less risky than Elmos Semiconductor. It trades about 0.02 of its potential returns per unit of risk. Elmos Semiconductor SE is currently generating about -0.02 per unit of risk. If you would invest  27,438  in Triad Group PLC on September 25, 2024 and sell it today you would earn a total of  562.00  from holding Triad Group PLC or generate 2.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Triad Group PLC  vs.  Elmos Semiconductor SE

Triad Group PLC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Triad Group PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Triad Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Elmos Semiconductor

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Elmos Semiconductor SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Elmos Semiconductor is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Triad Group and Elmos Semiconductor

The main advantage of trading using opposite Triad Group and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triad Group 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 Triad Group PLC 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.