Correlation Between Elcom Technology and AgriBank Securities
Can any of the company-specific risk be diversified away by investing in both Elcom Technology and AgriBank Securities 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 Elcom Technology and AgriBank Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elcom Technology Communications and AgriBank Securities JSC, you can compare the effects of market volatilities on Elcom Technology and AgriBank Securities 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 Elcom Technology with a short position of AgriBank Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and AgriBank Securities.
Diversification Opportunities for Elcom Technology and AgriBank Securities
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elcom and AgriBank is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and AgriBank Securities JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriBank Securities JSC and Elcom Technology 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 Elcom Technology Communications are associated (or correlated) with AgriBank Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriBank Securities JSC has no effect on the direction of Elcom Technology i.e., Elcom Technology and AgriBank Securities go up and down completely randomly.
Pair Corralation between Elcom Technology and AgriBank Securities
Assuming the 90 days trading horizon Elcom Technology Communications is expected to generate 1.64 times more return on investment than AgriBank Securities. However, Elcom Technology is 1.64 times more volatile than AgriBank Securities JSC. It trades about 0.07 of its potential returns per unit of risk. AgriBank Securities JSC is currently generating about -0.2 per unit of risk. If you would invest 2,730,000 in Elcom Technology Communications on November 3, 2024 and sell it today you would earn a total of 55,000 from holding Elcom Technology Communications or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elcom Technology Communication vs. AgriBank Securities JSC
Performance |
| Timeline |
| Elcom Technology Com |
| AgriBank Securities JSC |
Elcom Technology and AgriBank Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elcom Technology and AgriBank Securities
The main advantage of trading using opposite Elcom Technology and AgriBank Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, AgriBank Securities 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 AgriBank Securities will offset losses from the drop in AgriBank Securities' long position.| Elcom Technology vs. Song Hong Aluminum | Elcom Technology vs. Vietnam Technological And | Elcom Technology vs. Transport and Industry | Elcom Technology vs. Vietnam Rubber Group |
| AgriBank Securities vs. FIT INVEST JSC | AgriBank Securities vs. Damsan JSC | AgriBank Securities vs. An Phat Plastic | AgriBank Securities vs. APG Securities Joint |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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