Correlation Between Thanh Dat and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both Thanh Dat 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 Thanh Dat and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thanh Dat Investment and Elcom Technology Communications, you can compare the effects of market volatilities on Thanh Dat 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 Thanh Dat with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thanh Dat and Elcom Technology.
Diversification Opportunities for Thanh Dat and Elcom Technology
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thanh and Elcom is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Thanh Dat Investment 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 Thanh Dat 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 Thanh Dat Investment 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 Thanh Dat i.e., Thanh Dat and Elcom Technology go up and down completely randomly.
Pair Corralation between Thanh Dat and Elcom Technology
Assuming the 90 days trading horizon Thanh Dat Investment is expected to generate 1.88 times more return on investment than Elcom Technology. However, Thanh Dat is 1.88 times more volatile than Elcom Technology Communications. It trades about 0.06 of its potential returns per unit of risk. Elcom Technology Communications is currently generating about 0.09 per unit of risk. If you would invest 2,570,000 in Thanh Dat Investment on August 31, 2024 and sell it today you would earn a total of 70,000 from holding Thanh Dat Investment or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thanh Dat Investment vs. Elcom Technology Communication
Performance |
| Timeline |
| Thanh Dat Investment |
| Elcom Technology Com |
Thanh Dat and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thanh Dat and Elcom Technology
The main advantage of trading using opposite Thanh Dat and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thanh Dat 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.| Thanh Dat vs. FIT INVEST JSC | Thanh Dat vs. Damsan JSC | Thanh Dat vs. An Phat Plastic | Thanh Dat vs. Alphanam ME |
| Elcom Technology vs. FIT INVEST JSC | Elcom Technology vs. Damsan JSC | Elcom Technology vs. An Phat Plastic | Elcom Technology vs. Alphanam ME |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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