Correlation Between METTLER TOLEDO and SemiLEDS

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

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

Diversification Opportunities for METTLER TOLEDO and SemiLEDS

0.69

Correlation Coefficient

METTLER TOLEDO  SemiLEDS

Poor diversification

The 3 months correlation between METTLER and SemiLEDS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding METTLER TOLEDO INTL and SemiLEDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SemiLEDS and METTLER TOLEDO 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 METTLER TOLEDO INTL are associated (or correlated) with SemiLEDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SemiLEDS has no effect on the direction of METTLER TOLEDO i.e., METTLER TOLEDO and SemiLEDS go up and down completely randomly.

Pair Corralation between METTLER TOLEDO and SemiLEDS

Assuming the 90 days trading horizon METTLER TOLEDO INTL is expected to generate 0.34 times more return on investment than SemiLEDS. However, METTLER TOLEDO INTL is 2.96 times less risky than SemiLEDS. It trades about 0.14 of its potential returns per unit of risk. SemiLEDS is currently generating about 0.04 per unit of risk. If you would invest  89,460  in METTLER TOLEDO INTL on April 23, 2025 and sell it today you would earn a total of  13,940  from holding METTLER TOLEDO INTL or generate 15.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

METTLER TOLEDO INTL  vs.  SemiLEDS

METTLER TOLEDO INTL

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in METTLER TOLEDO INTL are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, METTLER TOLEDO unveiled solid returns over the last few months and may actually be approaching a breakup point.

SemiLEDS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SemiLEDS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, SemiLEDS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with METTLER TOLEDO and SemiLEDS

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

The idea behind METTLER TOLEDO INTL and SemiLEDS 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 Transaction History module to view history of all your transactions and understand their impact on performance.