Correlation Between Elcom Technology and Vinacomin Power
Can any of the company-specific risk be diversified away by investing in both Elcom Technology and Vinacomin Power 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 Vinacomin Power 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 Vinacomin Power Holding, you can compare the effects of market volatilities on Elcom Technology and Vinacomin Power 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 Vinacomin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and Vinacomin Power.
Diversification Opportunities for Elcom Technology and Vinacomin Power
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elcom and Vinacomin is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and Vinacomin Power Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinacomin Power Holding 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 Vinacomin Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinacomin Power Holding has no effect on the direction of Elcom Technology i.e., Elcom Technology and Vinacomin Power go up and down completely randomly.
Pair Corralation between Elcom Technology and Vinacomin Power
Assuming the 90 days trading horizon Elcom Technology Communications is expected to generate 0.52 times more return on investment than Vinacomin Power. However, Elcom Technology Communications is 1.91 times less risky than Vinacomin Power. It trades about 0.17 of its potential returns per unit of risk. Vinacomin Power Holding is currently generating about -0.04 per unit of risk. If you would invest 2,355,000 in Elcom Technology Communications on September 12, 2024 and sell it today you would earn a total of 390,000 from holding Elcom Technology Communications or generate 16.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 73.85% |
| Values | Daily Returns |
Elcom Technology Communication vs. Vinacomin Power Holding
Performance |
| Timeline |
| Elcom Technology Com |
| Vinacomin Power Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Elcom Technology and Vinacomin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elcom Technology and Vinacomin Power
The main advantage of trading using opposite Elcom Technology and Vinacomin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, Vinacomin Power 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 Vinacomin Power will offset losses from the drop in Vinacomin Power'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 |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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