Correlation Between ELMOS SEMICONDUCTOR and American Airlines
Can any of the company-specific risk be diversified away by investing in both ELMOS SEMICONDUCTOR and American Airlines 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 ELMOS SEMICONDUCTOR and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELMOS SEMICONDUCTOR and American Airlines Group, you can compare the effects of market volatilities on ELMOS SEMICONDUCTOR and American Airlines 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 ELMOS SEMICONDUCTOR with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELMOS SEMICONDUCTOR and American Airlines.
Diversification Opportunities for ELMOS SEMICONDUCTOR and American Airlines
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between ELMOS and American is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding ELMOS SEMICONDUCTOR and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR are associated (or correlated) with American Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Airlines has no effect on the direction of ELMOS SEMICONDUCTOR i.e., ELMOS SEMICONDUCTOR and American Airlines go up and down completely randomly.
Pair Corralation between ELMOS SEMICONDUCTOR and American Airlines
Assuming the 90 days trading horizon ELMOS SEMICONDUCTOR is expected to generate 1.1 times more return on investment than American Airlines. However, ELMOS SEMICONDUCTOR is 1.1 times more volatile than American Airlines Group. It trades about 0.03 of its potential returns per unit of risk. American Airlines Group is currently generating about 0.03 per unit of risk. If you would invest 5,272 in ELMOS SEMICONDUCTOR on September 26, 2024 and sell it today you would earn a total of 1,518 from holding ELMOS SEMICONDUCTOR or generate 28.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ELMOS SEMICONDUCTOR vs. American Airlines Group
Performance |
Timeline |
ELMOS SEMICONDUCTOR |
American Airlines |
ELMOS SEMICONDUCTOR and American Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ELMOS SEMICONDUCTOR and American Airlines
The main advantage of trading using opposite ELMOS SEMICONDUCTOR and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELMOS SEMICONDUCTOR position performs unexpectedly, American Airlines 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 American Airlines will offset losses from the drop in American Airlines' long position.ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Microsoft | ELMOS SEMICONDUCTOR vs. Microsoft |
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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.
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