Correlation Between Vietnam JSCmmercial and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both Vietnam JSCmmercial 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 Vietnam JSCmmercial and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam JSCmmercial Bank and Elcom Technology Communications, you can compare the effects of market volatilities on Vietnam JSCmmercial 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 Vietnam JSCmmercial with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam JSCmmercial and Elcom Technology.
Diversification Opportunities for Vietnam JSCmmercial and Elcom Technology
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vietnam and Elcom is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam JSCmmercial Bank 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 Vietnam JSCmmercial 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 Vietnam JSCmmercial Bank 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 Vietnam JSCmmercial i.e., Vietnam JSCmmercial and Elcom Technology go up and down completely randomly.
Pair Corralation between Vietnam JSCmmercial and Elcom Technology
Assuming the 90 days trading horizon Vietnam JSCmmercial is expected to generate 1.14 times less return on investment than Elcom Technology. But when comparing it to its historical volatility, Vietnam JSCmmercial Bank is 1.33 times less risky than Elcom Technology. It trades about 0.08 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam JSCmmercial Bank vs. Elcom Technology Communication
Performance |
| Timeline |
| Vietnam JSCmmercial Bank |
| Elcom Technology Com |
Vietnam JSCmmercial and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam JSCmmercial and Elcom Technology
The main advantage of trading using opposite Vietnam JSCmmercial and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam JSCmmercial 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.| Vietnam JSCmmercial vs. FIT INVEST JSC | Vietnam JSCmmercial vs. Damsan JSC | Vietnam JSCmmercial vs. An Phat Plastic | Vietnam JSCmmercial 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |