Correlation Between Elmos Semiconductor and MAVEN WIRELESS

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

By analyzing existing cross correlation between Elmos Semiconductor SE and MAVEN WIRELESS SWEDEN, you can compare the effects of market volatilities on Elmos Semiconductor and MAVEN WIRELESS 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 MAVEN WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and MAVEN WIRELESS.

Diversification Opportunities for Elmos Semiconductor and MAVEN WIRELESS

0.38

Correlation Coefficient

Elmos Semiconductor  MAVEN WIRELESS

Weak diversification

The 3 months correlation between Elmos and MAVEN is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and MAVEN WIRELESS SWEDEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAVEN WIRELESS SWEDEN 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 SE are associated (or correlated) with MAVEN WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAVEN WIRELESS SWEDEN has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and MAVEN WIRELESS go up and down completely randomly.

Pair Corralation between Elmos Semiconductor and MAVEN WIRELESS

Assuming the 90 days trading horizon Elmos Semiconductor SE is expected to under-perform the MAVEN WIRELESS. In addition to that, Elmos Semiconductor is 1.3 times more volatile than MAVEN WIRELESS SWEDEN. It trades about -0.1 of its total potential returns per unit of risk. MAVEN WIRELESS SWEDEN is currently generating about -0.1 per unit of volatility. If you would invest  105.00  in MAVEN WIRELESS SWEDEN on September 2, 2024 and sell it today you would lose (18.00) from holding MAVEN WIRELESS SWEDEN or give up 17.14% of portfolio value over 90 days.

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

Elmos Semiconductor SE  vs.  MAVEN WIRELESS SWEDEN

Elmos Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elmos Semiconductor SE 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 comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

MAVEN WIRELESS SWEDEN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAVEN WIRELESS SWEDEN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile 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.

Pair Trading with Elmos Semiconductor and MAVEN WIRELESS

The main advantage of trading using opposite Elmos Semiconductor and MAVEN WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elmos Semiconductor position performs unexpectedly, MAVEN WIRELESS 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 MAVEN WIRELESS will offset losses from the drop in MAVEN WIRELESS's long position.

The idea behind Elmos Semiconductor SE and MAVEN WIRELESS SWEDEN 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.