Correlation Between Elcom Technology and Ducgiang Chemicals
Can any of the company-specific risk be diversified away by investing in both Elcom Technology and Ducgiang Chemicals 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 Ducgiang Chemicals 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 Ducgiang Chemicals Detergent, you can compare the effects of market volatilities on Elcom Technology and Ducgiang Chemicals 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 Ducgiang Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and Ducgiang Chemicals.
Diversification Opportunities for Elcom Technology and Ducgiang Chemicals
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elcom and Ducgiang is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and Ducgiang Chemicals Detergent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ducgiang Chemicals 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 Ducgiang Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ducgiang Chemicals has no effect on the direction of Elcom Technology i.e., Elcom Technology and Ducgiang Chemicals go up and down completely randomly.
Pair Corralation between Elcom Technology and Ducgiang Chemicals
Assuming the 90 days trading horizon Elcom Technology Communications is expected to generate 1.56 times more return on investment than Ducgiang Chemicals. However, Elcom Technology is 1.56 times more volatile than Ducgiang Chemicals Detergent. It trades about 0.01 of its potential returns per unit of risk. Ducgiang Chemicals Detergent is currently generating about -0.18 per unit of risk. If you would invest 2,660,000 in Elcom Technology Communications on October 11, 2024 and sell it today you would earn a total of 0.00 from holding Elcom Technology Communications or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elcom Technology Communication vs. Ducgiang Chemicals Detergent
Performance |
| Timeline |
| Elcom Technology Com |
| Ducgiang Chemicals |
Elcom Technology and Ducgiang Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elcom Technology and Ducgiang Chemicals
The main advantage of trading using opposite Elcom Technology and Ducgiang Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, Ducgiang Chemicals 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 Ducgiang Chemicals will offset losses from the drop in Ducgiang Chemicals' long position.| Elcom Technology vs. Tien Giang Investment | Elcom Technology vs. Danang Education Investment | Elcom Technology vs. FPT Digital Retail | Elcom Technology vs. HUD1 Investment and |
| Ducgiang Chemicals vs. Danang Education Investment | Ducgiang Chemicals vs. Vina2 Investment and | Ducgiang Chemicals vs. Dinhvu Port Investment | Ducgiang Chemicals vs. Riverway Management 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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