Correlation Between 191216CU2 and Elmos Semiconductor

Can any of the company-specific risk be diversified away by investing in both 191216CU2 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 191216CU2 and Elmos Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COCA COLA CO and Elmos Semiconductor SE, you can compare the effects of market volatilities on 191216CU2 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 191216CU2 with a short position of Elmos Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of 191216CU2 and Elmos Semiconductor.

Diversification Opportunities for 191216CU2 and Elmos Semiconductor

0.0

Correlation Coefficient

191216CU2  Elmos Semiconductor

Pay attention - limited upside

The 3 months correlation between 191216CU2 and Elmos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding COCA COLA CO and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor and 191216CU2 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 COCA COLA CO 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 191216CU2 i.e., 191216CU2 and Elmos Semiconductor go up and down completely randomly.

Pair Corralation between 191216CU2 and Elmos Semiconductor

If you would invest  8,923  in Elmos Semiconductor SE on December 24, 2024 and sell it today you would earn a total of  0.00  from holding Elmos Semiconductor SE or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

COCA COLA CO  vs.  Elmos Semiconductor SE

COCA A CO

Risk-Adjusted Performance

Very Weak

Over the last 90 days COCA COLA CO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 191216CU2 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Elmos Semiconductor

Risk-Adjusted Performance

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 191216CU2 and Elmos Semiconductor

The main advantage of trading using opposite 191216CU2 and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 191216CU2 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 COCA COLA CO 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.