Correlation Between Elcom Technology and Idico JSC
Can any of the company-specific risk be diversified away by investing in both Elcom Technology and Idico JSC 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 Idico JSC 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 Idico JSC, you can compare the effects of market volatilities on Elcom Technology and Idico JSC 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 Idico JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and Idico JSC.
Diversification Opportunities for Elcom Technology and Idico JSC
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elcom and Idico is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and Idico JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idico JSC 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 Idico JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idico JSC has no effect on the direction of Elcom Technology i.e., Elcom Technology and Idico JSC go up and down completely randomly.
Pair Corralation between Elcom Technology and Idico JSC
Assuming the 90 days trading horizon Elcom Technology Communications is expected to generate 1.57 times more return on investment than Idico JSC. However, Elcom Technology is 1.57 times more volatile than Idico JSC. It trades about 0.08 of its potential returns per unit of risk. Idico JSC is currently generating about 0.05 per unit of risk. If you would invest 1,875,000 in Elcom Technology Communications on September 14, 2024 and sell it today you would earn a total of 875,000 from holding Elcom Technology Communications or generate 46.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elcom Technology Communication vs. Idico JSC
Performance |
| Timeline |
| Elcom Technology Com |
| Idico JSC |
Elcom Technology and Idico JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elcom Technology and Idico JSC
The main advantage of trading using opposite Elcom Technology and Idico JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, Idico JSC 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 Idico JSC will offset losses from the drop in Idico JSC's long position.| Elcom Technology vs. Telecoms Informatics JSC | Elcom Technology vs. Bich Chi Food | Elcom Technology vs. Development Investment Construction | Elcom Technology vs. PV2 Investment JSC |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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