Correlation Between AUSTEVOLL SEAFOOD and ELMOS SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD and ELMOS SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUSTEVOLL SEAFOOD and ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD with a short position of ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUSTEVOLL SEAFOOD and ELMOS SEMICONDUCTOR.
Diversification Opportunities for AUSTEVOLL SEAFOOD and ELMOS SEMICONDUCTOR
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between AUSTEVOLL and ELMOS is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding AUSTEVOLL SEAFOOD and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR and AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD i.e., AUSTEVOLL SEAFOOD and ELMOS SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between AUSTEVOLL SEAFOOD and ELMOS SEMICONDUCTOR
Assuming the 90 days trading horizon AUSTEVOLL SEAFOOD is expected to generate 2.04 times more return on investment than ELMOS SEMICONDUCTOR. However, AUSTEVOLL SEAFOOD is 2.04 times more volatile than ELMOS SEMICONDUCTOR. It trades about 0.05 of its potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about 0.03 per unit of risk. If you would invest 374.00 in AUSTEVOLL SEAFOOD on September 25, 2024 and sell it today you would earn a total of 452.00 from holding AUSTEVOLL SEAFOOD or generate 120.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
AUSTEVOLL SEAFOOD vs. ELMOS SEMICONDUCTOR
Performance |
Timeline |
AUSTEVOLL SEAFOOD |
ELMOS SEMICONDUCTOR |
AUSTEVOLL SEAFOOD and ELMOS SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AUSTEVOLL SEAFOOD and ELMOS SEMICONDUCTOR
The main advantage of trading using opposite AUSTEVOLL SEAFOOD and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUSTEVOLL SEAFOOD 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.AUSTEVOLL SEAFOOD vs. Apple Inc | AUSTEVOLL SEAFOOD vs. Apple Inc | AUSTEVOLL SEAFOOD vs. Microsoft | AUSTEVOLL SEAFOOD vs. Microsoft |
ELMOS SEMICONDUCTOR vs. CVS Health | ELMOS SEMICONDUCTOR vs. INDOFOOD AGRI RES | ELMOS SEMICONDUCTOR vs. FEMALE HEALTH | ELMOS SEMICONDUCTOR vs. AUSTEVOLL SEAFOOD |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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