Correlation Between Elcom Technology and Development Investment
Can any of the company-specific risk be diversified away by investing in both Elcom Technology and Development Investment 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 Development Investment 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 Development Investment Construction, you can compare the effects of market volatilities on Elcom Technology and Development Investment 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 Development Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and Development Investment.
Diversification Opportunities for Elcom Technology and Development Investment
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elcom and Development is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and Development Investment Constru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Development Investment 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 Development Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Development Investment has no effect on the direction of Elcom Technology i.e., Elcom Technology and Development Investment go up and down completely randomly.
Pair Corralation between Elcom Technology and Development Investment
Assuming the 90 days trading horizon Elcom Technology Communications is expected to under-perform the Development Investment. In addition to that, Elcom Technology is 2.16 times more volatile than Development Investment Construction. It trades about -0.15 of its total potential returns per unit of risk. Development Investment Construction is currently generating about 0.08 per unit of volatility. If you would invest 1,570,000 in Development Investment Construction on December 31, 2024 and sell it today you would earn a total of 20,000 from holding Development Investment Construction or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Elcom Technology Communication vs. Development Investment Constru
Performance |
| Timeline |
| Elcom Technology Com |
| Development Investment |
Elcom Technology and Development Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elcom Technology and Development Investment
The main advantage of trading using opposite Elcom Technology and Development Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, Development Investment 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 Development Investment will offset losses from the drop in Development Investment's long position.| Elcom Technology vs. PetroVietnam Transportation Corp | ||
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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