Correlation Between Elcom Technology and Kien Giang
Can any of the company-specific risk be diversified away by investing in both Elcom Technology and Kien Giang 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 Kien Giang 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 Kien Giang Construction, you can compare the effects of market volatilities on Elcom Technology and Kien Giang 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 Kien Giang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and Kien Giang.
Diversification Opportunities for Elcom Technology and Kien Giang
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elcom and Kien is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and Kien Giang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kien Giang Construction 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 Kien Giang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kien Giang Construction has no effect on the direction of Elcom Technology i.e., Elcom Technology and Kien Giang go up and down completely randomly.
Pair Corralation between Elcom Technology and Kien Giang
Assuming the 90 days trading horizon Elcom Technology Communications is expected to generate 1.22 times more return on investment than Kien Giang. However, Elcom Technology is 1.22 times more volatile than Kien Giang Construction. It trades about 0.12 of its potential returns per unit of risk. Kien Giang Construction is currently generating about -0.13 per unit of risk. If you would invest 2,625,000 in Elcom Technology Communications on September 13, 2024 and sell it today you would earn a total of 120,000 from holding Elcom Technology Communications or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elcom Technology Communication vs. Kien Giang Construction
Performance |
| Timeline |
| Elcom Technology Com |
| Kien Giang Construction |
Elcom Technology and Kien Giang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elcom Technology and Kien Giang
The main advantage of trading using opposite Elcom Technology and Kien Giang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, Kien Giang 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 Kien Giang will offset losses from the drop in Kien Giang's long position.| Elcom Technology vs. FIT INVEST JSC | Elcom Technology vs. Damsan JSC | Elcom Technology vs. An Phat Plastic | Elcom Technology vs. Alphanam ME |
| Kien Giang vs. SCG Construction JSC | Kien Giang vs. Binh Duong Construction | Kien Giang vs. POST TELECOMMU | Kien Giang vs. Elcom Technology Communications |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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