Correlation Between Intel and Elmos Semiconductor

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

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

Diversification Opportunities for Intel and Elmos Semiconductor

-0.44

Correlation Coefficient

Intel  Elmos Semiconductor

Very good diversification

The 3 months correlation between Intel and Elmos is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor and Intel 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 Intel 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 Intel i.e., Intel and Elmos Semiconductor go up and down completely randomly.

Pair Corralation between Intel and Elmos Semiconductor

Assuming the 90 days trading horizon Intel is expected to generate 0.94 times more return on investment than Elmos Semiconductor. However, Intel is 1.07 times less risky than Elmos Semiconductor. It trades about 0.17 of its potential returns per unit of risk. Elmos Semiconductor SE is currently generating about -0.09 per unit of risk. If you would invest  1,782  in Intel on September 4, 2024 and sell it today you would earn a total of  633.00  from holding Intel or generate 35.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Intel  vs.  Elmos Semiconductor SE

Intel

Risk-Adjusted Performance

13 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile essential indicators, Intel unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 fragile 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.

Pair Trading with Intel and Elmos Semiconductor

The main advantage of trading using opposite Intel and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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 Intel 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.