Correlation Between Elcom Technology and Binh Minh
Can any of the company-specific risk be diversified away by investing in both Elcom Technology and Binh Minh 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 Binh Minh 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 Binh Minh Plastics, you can compare the effects of market volatilities on Elcom Technology and Binh Minh 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 Binh Minh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and Binh Minh.
Diversification Opportunities for Elcom Technology and Binh Minh
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elcom and Binh is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and Binh Minh Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Minh Plastics 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 Binh Minh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Minh Plastics has no effect on the direction of Elcom Technology i.e., Elcom Technology and Binh Minh go up and down completely randomly.
Pair Corralation between Elcom Technology and Binh Minh
Assuming the 90 days trading horizon Elcom Technology is expected to generate 1.32 times less return on investment than Binh Minh. In addition to that, Elcom Technology is 1.13 times more volatile than Binh Minh Plastics. It trades about 0.08 of its total potential returns per unit of risk. Binh Minh Plastics is currently generating about 0.11 per unit of volatility. If you would invest 3,910,468 in Binh Minh Plastics on October 30, 2024 and sell it today you would earn a total of 8,769,532 from holding Binh Minh Plastics or generate 224.26% 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. Binh Minh Plastics
Performance |
| Timeline |
| Elcom Technology Com |
| Binh Minh Plastics |
Elcom Technology and Binh Minh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elcom Technology and Binh Minh
The main advantage of trading using opposite Elcom Technology and Binh Minh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, Binh Minh 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 Binh Minh will offset losses from the drop in Binh Minh's long position.| Elcom Technology vs. FIT INVEST JSC | Elcom Technology vs. Damsan JSC | Elcom Technology vs. An Phat Plastic | Elcom Technology vs. APG Securities Joint |
| Binh Minh vs. DIC Holdings Construction | Binh Minh vs. Transport and Industry | Binh Minh vs. Da Nang Construction | Binh Minh vs. Transimex Transportation JSC |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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