Correlation Between BaoMinh Insurance and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both BaoMinh Insurance and Elcom 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 BaoMinh Insurance and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BaoMinh Insurance Corp and Elcom Technology Communications, you can compare the effects of market volatilities on BaoMinh Insurance and Elcom 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 BaoMinh Insurance with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of BaoMinh Insurance and Elcom Technology.
Diversification Opportunities for BaoMinh Insurance and Elcom Technology
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BaoMinh and Elcom is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding BaoMinh Insurance Corp and Elcom Technology Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elcom Technology Com and BaoMinh Insurance 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 BaoMinh Insurance Corp are associated (or correlated) with Elcom Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elcom Technology Com has no effect on the direction of BaoMinh Insurance i.e., BaoMinh Insurance and Elcom Technology go up and down completely randomly.
Pair Corralation between BaoMinh Insurance and Elcom Technology
Assuming the 90 days trading horizon BaoMinh Insurance is expected to generate 2.73 times less return on investment than Elcom Technology. But when comparing it to its historical volatility, BaoMinh Insurance Corp is 1.32 times less risky than Elcom Technology. It trades about 0.03 of its potential returns per unit of risk. Elcom Technology Communications is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,950,000 in Elcom Technology Communications on September 3, 2024 and sell it today you would earn a total of 695,000 from holding Elcom Technology Communications or generate 35.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BaoMinh Insurance Corp vs. Elcom Technology Communication
Performance |
| Timeline |
| BaoMinh Insurance Corp |
| Elcom Technology Com |
BaoMinh Insurance and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BaoMinh Insurance and Elcom Technology
The main advantage of trading using opposite BaoMinh Insurance and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BaoMinh Insurance position performs unexpectedly, Elcom 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 Elcom Technology will offset losses from the drop in Elcom Technology's long position.| BaoMinh Insurance vs. FIT INVEST JSC | BaoMinh Insurance vs. Damsan JSC | BaoMinh Insurance vs. An Phat Plastic | BaoMinh Insurance vs. Alphanam ME |
| Elcom Technology vs. Tin Nghia Industrial | Elcom Technology vs. Global Electrical Technology | Elcom Technology vs. Hochiminh City Metal | Elcom Technology vs. Sea Air Freight |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |