Correlation Between ONWARD MEDICAL and ELMOS SEMICONDUCTOR

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

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

Diversification Opportunities for ONWARD MEDICAL and ELMOS SEMICONDUCTOR

-0.21

Correlation Coefficient

ONWARD MEDICAL  ELMOS SEMICONDUCTOR

Very good diversification

The 3 months correlation between ONWARD and ELMOS is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding ONWARD MEDICAL BV and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR and ONWARD MEDICAL 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 ONWARD MEDICAL BV 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 ONWARD MEDICAL i.e., ONWARD MEDICAL and ELMOS SEMICONDUCTOR go up and down completely randomly.

Pair Corralation between ONWARD MEDICAL and ELMOS SEMICONDUCTOR

Assuming the 90 days horizon ONWARD MEDICAL BV is expected to generate 1.06 times more return on investment than ELMOS SEMICONDUCTOR. However, ONWARD MEDICAL is 1.06 times more volatile than ELMOS SEMICONDUCTOR. It trades about -0.02 of its potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about -0.09 per unit of risk. If you would invest  486.00  in ONWARD MEDICAL BV on August 24, 2024 and sell it today you would lose (37.00) from holding ONWARD MEDICAL BV or give up 7.61% of portfolio value over 90 days.

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

ONWARD MEDICAL BV  vs.  ELMOS SEMICONDUCTOR

ONWARD MEDICAL BV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ONWARD MEDICAL BV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ONWARD MEDICAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ELMOS SEMICONDUCTOR

Risk-Adjusted Performance

0 of 100

Very 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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with ONWARD MEDICAL and ELMOS SEMICONDUCTOR

The main advantage of trading using opposite ONWARD MEDICAL and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONWARD MEDICAL 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 ONWARD MEDICAL BV 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 CEOs Directory module to screen CEOs from public companies around the world.