Correlation Between Ba Ria and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both Ba Ria 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 Ba Ria and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ba Ria Thermal and Elcom Technology Communications, you can compare the effects of market volatilities on Ba Ria 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 Ba Ria with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ba Ria and Elcom Technology.
Diversification Opportunities for Ba Ria and Elcom Technology
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BTP and Elcom is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ba Ria Thermal 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 Ba Ria 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 Ba Ria Thermal 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 Ba Ria i.e., Ba Ria and Elcom Technology go up and down completely randomly.
Pair Corralation between Ba Ria and Elcom Technology
Assuming the 90 days trading horizon Ba Ria Thermal is expected to under-perform the Elcom Technology. But the stock apears to be less risky and, when comparing its historical volatility, Ba Ria Thermal is 1.78 times less risky than Elcom Technology. The stock trades about -0.51 of its potential returns per unit of risk. The Elcom Technology Communications is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,525,000 in Elcom Technology Communications on September 3, 2024 and sell it today you would earn a total of 95,000 from holding Elcom Technology Communications or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ba Ria Thermal vs. Elcom Technology Communication
Performance |
| Timeline |
| Ba Ria Thermal |
| Elcom Technology Com |
Ba Ria and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ba Ria and Elcom Technology
The main advantage of trading using opposite Ba Ria and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ba Ria 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.The idea behind Ba Ria Thermal and Elcom Technology Communications 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.| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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