Correlation Between Lem Holding and Elma Electronic
Can any of the company-specific risk be diversified away by investing in both Lem Holding and Elma Electronic 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 Lem Holding and Elma Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lem Holding SA and Elma Electronic AG, you can compare the effects of market volatilities on Lem Holding and Elma Electronic 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 Lem Holding with a short position of Elma Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lem Holding and Elma Electronic.
Diversification Opportunities for Lem Holding and Elma Electronic
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lem and Elma is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Lem Holding SA and Elma Electronic AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elma Electronic AG and Lem Holding 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 Lem Holding SA are associated (or correlated) with Elma Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elma Electronic AG has no effect on the direction of Lem Holding i.e., Lem Holding and Elma Electronic go up and down completely randomly.
Pair Corralation between Lem Holding and Elma Electronic
Assuming the 90 days trading horizon Lem Holding SA is expected to under-perform the Elma Electronic. In addition to that, Lem Holding is 4.4 times more volatile than Elma Electronic AG. It trades about -0.24 of its total potential returns per unit of risk. Elma Electronic AG is currently generating about 0.22 per unit of volatility. If you would invest 102,000 in Elma Electronic AG on September 20, 2024 and sell it today you would earn a total of 3,000 from holding Elma Electronic AG or generate 2.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 26.56% |
Values | Daily Returns |
Lem Holding SA vs. Elma Electronic AG
Performance |
Timeline |
Lem Holding SA |
Elma Electronic AG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Lem Holding and Elma Electronic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lem Holding and Elma Electronic
The main advantage of trading using opposite Lem Holding and Elma Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lem Holding position performs unexpectedly, Elma Electronic 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 Elma Electronic will offset losses from the drop in Elma Electronic's long position.Lem Holding vs. Inficon Holding | Lem Holding vs. Belimo Holding | Lem Holding vs. Interroll Holding AG | Lem Holding vs. Comet Holding AG |
Elma Electronic vs. Carlo Gavazzi Holding | Elma Electronic vs. Feintool International Holding | Elma Electronic vs. Graubuendner Kantonalbank | Elma Electronic vs. Also Holding AG |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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