Correlation Between Boiron SA and ELMOS SEMICONDUCTOR

Can any of the company-specific risk be diversified away by investing in both Boiron SA 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 Boiron SA and ELMOS SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boiron SA and ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on Boiron SA 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 Boiron SA with a short position of ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boiron SA and ELMOS SEMICONDUCTOR.

Diversification Opportunities for Boiron SA and ELMOS SEMICONDUCTOR

0.23

Correlation Coefficient

Boiron SA  ELMOS SEMICONDUCTOR

Modest diversification

The 3 months correlation between Boiron and ELMOS is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Boiron SA and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR and Boiron SA 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 Boiron SA 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 Boiron SA i.e., Boiron SA and ELMOS SEMICONDUCTOR go up and down completely randomly.

Pair Corralation between Boiron SA and ELMOS SEMICONDUCTOR

Assuming the 90 days horizon Boiron SA is expected to generate 0.55 times more return on investment than ELMOS SEMICONDUCTOR. However, Boiron SA is 1.81 times less risky than ELMOS SEMICONDUCTOR. It trades about -0.12 of its potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about -0.11 per unit of risk. If you would invest  3,250  in Boiron SA on September 3, 2024 and sell it today you would lose (450.00) from holding Boiron SA or give up 13.85% of portfolio value over 90 days.

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

Boiron SA  vs.  ELMOS SEMICONDUCTOR

Boiron SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boiron SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ELMOS SEMICONDUCTOR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ELMOS SEMICONDUCTOR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Boiron SA and ELMOS SEMICONDUCTOR

The main advantage of trading using opposite Boiron SA and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boiron SA 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 Boiron SA and ELMOS SEMICONDUCTOR 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.