Correlation Between Elcom Technology and Military Insurance
Can any of the company-specific risk be diversified away by investing in both Elcom Technology and Military Insurance 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 Military Insurance 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 Military Insurance Corp, you can compare the effects of market volatilities on Elcom Technology and Military Insurance 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 Military Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and Military Insurance.
Diversification Opportunities for Elcom Technology and Military Insurance
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elcom and Military is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and Military Insurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Military Insurance Corp 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 Military Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Military Insurance Corp has no effect on the direction of Elcom Technology i.e., Elcom Technology and Military Insurance go up and down completely randomly.
Pair Corralation between Elcom Technology and Military Insurance
Assuming the 90 days trading horizon Elcom Technology Communications is expected to generate 1.39 times more return on investment than Military Insurance. However, Elcom Technology is 1.39 times more volatile than Military Insurance Corp. It trades about 0.09 of its potential returns per unit of risk. Military Insurance Corp is currently generating about 0.03 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elcom Technology Communication vs. Military Insurance Corp
Performance |
| Timeline |
| Elcom Technology Com |
| Military Insurance Corp |
Elcom Technology and Military Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elcom Technology and Military Insurance
The main advantage of trading using opposite Elcom Technology and Military Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, Military Insurance 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 Military Insurance will offset losses from the drop in Military Insurance'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 |
| Military Insurance vs. FIT INVEST JSC | Military Insurance vs. Damsan JSC | Military Insurance vs. An Phat Plastic | Military Insurance 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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