Correlation Between CMC Investment and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both CMC Investment 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 CMC Investment and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMC Investment JSC and Elcom Technology Communications, you can compare the effects of market volatilities on CMC Investment 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 CMC Investment with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMC Investment and Elcom Technology.
Diversification Opportunities for CMC Investment and Elcom Technology
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CMC and Elcom is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding CMC Investment JSC 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 CMC Investment 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 CMC Investment JSC 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 CMC Investment i.e., CMC Investment and Elcom Technology go up and down completely randomly.
Pair Corralation between CMC Investment and Elcom Technology
Assuming the 90 days trading horizon CMC Investment is expected to generate 1.1 times less return on investment than Elcom Technology. In addition to that, CMC Investment is 1.96 times more volatile than Elcom Technology Communications. It trades about 0.04 of its total potential returns per unit of risk. Elcom Technology Communications is currently generating about 0.08 per unit of volatility. If you would invest 1,020,000 in Elcom Technology Communications on August 25, 2024 and sell it today you would earn a total of 1,460,000 from holding Elcom Technology Communications or generate 143.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 69.78% |
| Values | Daily Returns |
CMC Investment JSC vs. Elcom Technology Communication
Performance |
| Timeline |
| CMC Investment JSC |
| Elcom Technology Com |
CMC Investment and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMC Investment and Elcom Technology
The main advantage of trading using opposite CMC Investment and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMC Investment 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.| CMC Investment vs. FIT INVEST JSC | CMC Investment vs. Damsan JSC | CMC Investment vs. An Phat Plastic | CMC Investment vs. APG Securities Joint |
| Elcom Technology vs. Development Investment Construction | Elcom Technology vs. Nafoods Group JSC | Elcom Technology vs. CMC Investment JSC | Elcom Technology vs. Saigon Telecommunication Technologies |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |