Correlation Between Ha Noi and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both Ha Noi 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 Ha Noi and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ha Noi Education and Elcom Technology Communications, you can compare the effects of market volatilities on Ha Noi 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 Ha Noi with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ha Noi and Elcom Technology.
Diversification Opportunities for Ha Noi and Elcom Technology
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between EID and Elcom is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ha Noi Education 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 Ha Noi 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 Ha Noi Education 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 Ha Noi i.e., Ha Noi and Elcom Technology go up and down completely randomly.
Pair Corralation between Ha Noi and Elcom Technology
Assuming the 90 days trading horizon Ha Noi is expected to generate 1.08 times less return on investment than Elcom Technology. But when comparing it to its historical volatility, Ha Noi Education is 1.81 times less risky than Elcom Technology. It trades about 0.11 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 Together |
| Strength | Insignificant |
| Accuracy | 97.14% |
| Values | Daily Returns |
Ha Noi Education vs. Elcom Technology Communication
Performance |
| Timeline |
| Ha Noi Education |
| Elcom Technology Com |
Ha Noi and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ha Noi and Elcom Technology
The main advantage of trading using opposite Ha Noi and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ha Noi 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 Ha Noi Education 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 CEOs Directory module to screen CEOs from public companies around the world.
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