Correlation Between SemiLEDS and Cemtrex

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

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

Diversification Opportunities for SemiLEDS and Cemtrex

-0.14

Correlation Coefficient

SemiLEDS  Cemtrex

Good diversification

The 3 months correlation between SemiLEDS and Cemtrex is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding SemiLEDS and Cemtrex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cemtrex and SemiLEDS 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 SemiLEDS are associated (or correlated) with Cemtrex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cemtrex has no effect on the direction of SemiLEDS i.e., SemiLEDS and Cemtrex go up and down completely randomly.

Pair Corralation between SemiLEDS and Cemtrex

Given the investment horizon of 90 days SemiLEDS is expected to under-perform the Cemtrex. But the stock apears to be less risky and, when comparing its historical volatility, SemiLEDS is 1.63 times less risky than Cemtrex. The stock trades about -0.07 of its potential returns per unit of risk. The Cemtrex is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  151.00  in Cemtrex on May 11, 2025 and sell it today you would lose (25.00) from holding Cemtrex or give up 16.56% of portfolio value over 90 days.

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

SemiLEDS  vs.  Cemtrex

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.

Cemtrex

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cemtrex are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Cemtrex may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with SemiLEDS and Cemtrex

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

The idea behind SemiLEDS and Cemtrex 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.