Correlation Between WT OFFSHORE and ELMOS SEMICONDUCTOR

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

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

Diversification Opportunities for WT OFFSHORE and ELMOS SEMICONDUCTOR

-0.3

Correlation Coefficient

WT OFFSHORE  ELMOS SEMICONDUCTOR

Very good diversification

The 3 months correlation between UWV and ELMOS is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding WT OFFSHORE and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR and WT OFFSHORE 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 WT OFFSHORE 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 WT OFFSHORE i.e., WT OFFSHORE and ELMOS SEMICONDUCTOR go up and down completely randomly.

Pair Corralation between WT OFFSHORE and ELMOS SEMICONDUCTOR

Assuming the 90 days trading horizon WT OFFSHORE is expected to under-perform the ELMOS SEMICONDUCTOR. In addition to that, WT OFFSHORE is 1.19 times more volatile than ELMOS SEMICONDUCTOR. It trades about -0.04 of its total potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about -0.02 per unit of volatility. If you would invest  7,610  in ELMOS SEMICONDUCTOR on September 29, 2024 and sell it today you would lose (970.00) from holding ELMOS SEMICONDUCTOR or give up 12.75% of portfolio value over 90 days.

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

WT OFFSHORE  vs.  ELMOS SEMICONDUCTOR

WT OFFSHORE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WT OFFSHORE 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 basic 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.

ELMOS SEMICONDUCTOR

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days ELMOS SEMICONDUCTOR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, ELMOS SEMICONDUCTOR is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with WT OFFSHORE and ELMOS SEMICONDUCTOR

The main advantage of trading using opposite WT OFFSHORE and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WT OFFSHORE 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 WT OFFSHORE and ELMOS SEMICONDUCTOR 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.