Correlation Between Elmos Semiconductor and Hawkins

Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and Hawkins 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 Hawkins 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 Hawkins, you can compare the effects of market volatilities on Elmos Semiconductor and Hawkins 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 Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and Hawkins.

Diversification Opportunities for Elmos Semiconductor and Hawkins

0.0

Correlation Coefficient

Elmos Semiconductor  Hawkins

Pay attention - limited upside

The 3 months correlation between Elmos and Hawkins is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins 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 Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and Hawkins go up and down completely randomly.

Pair Corralation between Elmos Semiconductor and Hawkins

Assuming the 90 days horizon Elmos Semiconductor is expected to generate 2.53 times less return on investment than Hawkins. But when comparing it to its historical volatility, Elmos Semiconductor SE is 1.66 times less risky than Hawkins. It trades about 0.09 of its potential returns per unit of risk. Hawkins is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  6,379  in Hawkins on August 31, 2024 and sell it today you would earn a total of  6,960  from holding Hawkins or generate 109.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Elmos Semiconductor SE  vs.  Hawkins

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. Despite nearly stable basic indicators, Elmos Semiconductor is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Hawkins

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hawkins are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting forward-looking signals, Hawkins may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Elmos Semiconductor and Hawkins

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

The idea behind Elmos Semiconductor SE and Hawkins 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.