Correlation Between DIC Holdings and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both DIC Holdings 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 DIC Holdings and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DIC Holdings Construction and Elcom Technology Communications, you can compare the effects of market volatilities on DIC Holdings 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 DIC Holdings with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIC Holdings and Elcom Technology.
Diversification Opportunities for DIC Holdings and Elcom Technology
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DIC and Elcom is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding DIC Holdings Construction 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 DIC Holdings 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 DIC Holdings Construction 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 DIC Holdings i.e., DIC Holdings and Elcom Technology go up and down completely randomly.
Pair Corralation between DIC Holdings and Elcom Technology
Assuming the 90 days trading horizon DIC Holdings Construction is expected to under-perform the Elcom Technology. In addition to that, DIC Holdings is 1.56 times more volatile than Elcom Technology Communications. It trades about -0.02 of its total potential returns per unit of risk. Elcom Technology Communications is currently generating about 0.07 per unit of volatility. If you would invest 1,490,000 in Elcom Technology Communications on September 12, 2024 and sell it today you would earn a total of 1,170,000 from holding Elcom Technology Communications or generate 78.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DIC Holdings Construction vs. Elcom Technology Communication
Performance |
| Timeline |
| DIC Holdings Construction |
| Elcom Technology Com |
DIC Holdings and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DIC Holdings and Elcom Technology
The main advantage of trading using opposite DIC Holdings and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIC Holdings 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.| DIC Holdings vs. HUD1 Investment and | DIC Holdings vs. Sao Ta Foods | DIC Holdings vs. Duong Hieu Trading | DIC Holdings vs. CEO Group JSC |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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