Correlation Between ECSTELECOM and IC Technology
Can any of the company-specific risk be diversified away by investing in both ECSTELECOM and IC Technology 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 ECSTELECOM and IC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECSTELECOM Co and IC Technology Co, you can compare the effects of market volatilities on ECSTELECOM and IC Technology 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 ECSTELECOM with a short position of IC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECSTELECOM and IC Technology.
Diversification Opportunities for ECSTELECOM and IC Technology
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ECSTELECOM and 052860 is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ECSTELECOM Co and IC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IC Technology and ECSTELECOM 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 ECSTELECOM Co are associated (or correlated) with IC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IC Technology has no effect on the direction of ECSTELECOM i.e., ECSTELECOM and IC Technology go up and down completely randomly.
Pair Corralation between ECSTELECOM and IC Technology
Assuming the 90 days trading horizon ECSTELECOM Co is expected to under-perform the IC Technology. But the stock apears to be less risky and, when comparing its historical volatility, ECSTELECOM Co is 2.63 times less risky than IC Technology. The stock trades about -0.04 of its potential returns per unit of risk. The IC Technology Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 283,000 in IC Technology Co on September 14, 2024 and sell it today you would lose (69,500) from holding IC Technology Co or give up 24.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
ECSTELECOM Co vs. IC Technology Co
Performance |
| Timeline |
| ECSTELECOM |
| IC Technology |
ECSTELECOM and IC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECSTELECOM and IC Technology
The main advantage of trading using opposite ECSTELECOM and IC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECSTELECOM position performs unexpectedly, IC Technology 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 IC Technology will offset losses from the drop in IC Technology's long position.| ECSTELECOM vs. Solution Advanced Technology | ECSTELECOM vs. Busan Industrial Co | ECSTELECOM vs. Busan Ind | ECSTELECOM vs. Sam Chun Dang |
| IC Technology vs. Innowireless Co | IC Technology vs. KT Submarine Telecom | IC Technology vs. Netmarble Games Corp | IC Technology vs. Mgame Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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