Correlation Between Cemtrex and SemiLEDS

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

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

Diversification Opportunities for Cemtrex and SemiLEDS

-0.31

Correlation Coefficient

Cemtrex  SemiLEDS

Very good diversification

The 3 months correlation between Cemtrex and SemiLEDS is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Cemtrex and SemiLEDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SemiLEDS and Cemtrex 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 Cemtrex 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 Cemtrex i.e., Cemtrex and SemiLEDS go up and down completely randomly.

Pair Corralation between Cemtrex and SemiLEDS

Given the investment horizon of 90 days Cemtrex is expected to generate 1.48 times more return on investment than SemiLEDS. However, Cemtrex is 1.48 times more volatile than SemiLEDS. It trades about -0.03 of its potential returns per unit of risk. SemiLEDS is currently generating about -0.09 per unit of risk. If you would invest  169.00  in Cemtrex on May 26, 2025 and sell it today you would lose (51.00) from holding Cemtrex or give up 30.18% of portfolio value over 90 days.

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

Cemtrex  vs.  SemiLEDS

Cemtrex

Risk-Adjusted Performance

Weakest

Over the last 90 days Cemtrex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

SemiLEDS

Risk-Adjusted Performance

Weakest

Over the last 90 days SemiLEDS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Cemtrex and SemiLEDS

The main advantage of trading using opposite Cemtrex and SemiLEDS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cemtrex 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 Cemtrex 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.