Correlation Between Anfield Resources and Elmos Semiconductor

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

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

Diversification Opportunities for Anfield Resources and Elmos Semiconductor

-0.42

Correlation Coefficient

Anfield Resources  Elmos Semiconductor

Very good diversification

The 3 months correlation between Anfield and Elmos is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Resources and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor and Anfield Resources 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 Anfield Resources 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 Anfield Resources i.e., Anfield Resources and Elmos Semiconductor go up and down completely randomly.

Pair Corralation between Anfield Resources and Elmos Semiconductor

Assuming the 90 days trading horizon Anfield Resources is expected to generate 4.11 times more return on investment than Elmos Semiconductor. However, Anfield Resources is 4.11 times more volatile than Elmos Semiconductor SE. It trades about 0.12 of its potential returns per unit of risk. Elmos Semiconductor SE is currently generating about 0.06 per unit of risk. If you would invest  2.95  in Anfield Resources on September 20, 2024 and sell it today you would earn a total of  1.85  from holding Anfield Resources or generate 62.71% return on investment over 90 days.

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

Anfield Resources  vs.  Elmos Semiconductor SE

Anfield Resources

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Resources are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, Anfield Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Elmos Semiconductor

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Elmos Semiconductor SE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Elmos Semiconductor may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Anfield Resources and Elmos Semiconductor

The main advantage of trading using opposite Anfield Resources and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anfield Resources 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 Anfield Resources 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.