Correlation Between Elcom Technology and FPT Digital
Can any of the company-specific risk be diversified away by investing in both Elcom Technology and FPT Digital 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 FPT Digital 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 FPT Digital Retail, you can compare the effects of market volatilities on Elcom Technology and FPT Digital 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 FPT Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and FPT Digital.
Diversification Opportunities for Elcom Technology and FPT Digital
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elcom and FPT is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and FPT Digital Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FPT Digital Retail 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 FPT Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FPT Digital Retail has no effect on the direction of Elcom Technology i.e., Elcom Technology and FPT Digital go up and down completely randomly.
Pair Corralation between Elcom Technology and FPT Digital
Assuming the 90 days trading horizon Elcom Technology Communications is expected to generate 1.42 times more return on investment than FPT Digital. However, Elcom Technology is 1.42 times more volatile than FPT Digital Retail. It trades about 0.09 of its potential returns per unit of risk. FPT Digital Retail is currently generating about 0.12 per unit of risk. If you would invest 926,000 in Elcom Technology Communications on August 28, 2024 and sell it today you would earn a total of 1,589,000 from holding Elcom Technology Communications or generate 171.6% 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. FPT Digital Retail
Performance |
| Timeline |
| Elcom Technology Com |
| FPT Digital Retail |
Elcom Technology and FPT Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elcom Technology and FPT Digital
The main advantage of trading using opposite Elcom Technology and FPT Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, FPT Digital 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 FPT Digital will offset losses from the drop in FPT Digital's long position.| Elcom Technology vs. FIT INVEST JSC | Elcom Technology vs. Damsan JSC | Elcom Technology vs. An Phat Plastic | Elcom Technology vs. APG Securities Joint |
| FPT Digital vs. FIT INVEST JSC | FPT Digital vs. Damsan JSC | FPT Digital vs. An Phat Plastic | FPT Digital vs. APG Securities Joint |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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