Correlation Between Elcom Technology and Vietnam JSCmmercial
Can any of the company-specific risk be diversified away by investing in both Elcom Technology and Vietnam JSCmmercial 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 Vietnam JSCmmercial 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 Vietnam JSCmmercial Bank, you can compare the effects of market volatilities on Elcom Technology and Vietnam JSCmmercial 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 Vietnam JSCmmercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and Vietnam JSCmmercial.
Diversification Opportunities for Elcom Technology and Vietnam JSCmmercial
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elcom and Vietnam is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and Vietnam JSCmmercial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam JSCmmercial Bank 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 Vietnam JSCmmercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam JSCmmercial Bank has no effect on the direction of Elcom Technology i.e., Elcom Technology and Vietnam JSCmmercial go up and down completely randomly.
Pair Corralation between Elcom Technology and Vietnam JSCmmercial
Assuming the 90 days trading horizon Elcom Technology Communications is expected to generate 1.86 times more return on investment than Vietnam JSCmmercial. However, Elcom Technology is 1.86 times more volatile than Vietnam JSCmmercial Bank. It trades about 0.07 of its potential returns per unit of risk. Vietnam JSCmmercial Bank is currently generating about -0.01 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elcom Technology Communication vs. Vietnam JSCmmercial Bank
Performance |
| Timeline |
| Elcom Technology Com |
| Vietnam JSCmmercial Bank |
Elcom Technology and Vietnam JSCmmercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elcom Technology and Vietnam JSCmmercial
The main advantage of trading using opposite Elcom Technology and Vietnam JSCmmercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, Vietnam JSCmmercial 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 Vietnam JSCmmercial will offset losses from the drop in Vietnam JSCmmercial's 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 |
| Vietnam JSCmmercial vs. Telecoms Informatics JSC | Vietnam JSCmmercial vs. Tin Nghia Industrial | Vietnam JSCmmercial vs. Investment and Industrial | Vietnam JSCmmercial vs. Tienlen Steel Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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