Correlation Between Elcom Technology and POST TELECOMMU
Can any of the company-specific risk be diversified away by investing in both Elcom Technology and POST TELECOMMU 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 POST TELECOMMU 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 POST TELECOMMU, you can compare the effects of market volatilities on Elcom Technology and POST TELECOMMU 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 POST TELECOMMU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and POST TELECOMMU.
Diversification Opportunities for Elcom Technology and POST TELECOMMU
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elcom and POST is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and POST TELECOMMU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POST TELECOMMU 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 POST TELECOMMU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POST TELECOMMU has no effect on the direction of Elcom Technology i.e., Elcom Technology and POST TELECOMMU go up and down completely randomly.
Pair Corralation between Elcom Technology and POST TELECOMMU
Assuming the 90 days trading horizon Elcom Technology Communications is expected to generate 0.61 times more return on investment than POST TELECOMMU. However, Elcom Technology Communications is 1.63 times less risky than POST TELECOMMU. It trades about 0.12 of its potential returns per unit of risk. POST TELECOMMU is currently generating about 0.07 per unit of risk. If you would invest 2,525,000 in Elcom Technology Communications on September 3, 2024 and sell it today you would earn a total of 95,000 from holding Elcom Technology Communications or generate 3.76% 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. POST TELECOMMU
Performance |
| Timeline |
| Elcom Technology Com |
| POST TELECOMMU |
Elcom Technology and POST TELECOMMU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elcom Technology and POST TELECOMMU
The main advantage of trading using opposite Elcom Technology and POST TELECOMMU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, POST TELECOMMU 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 POST TELECOMMU will offset losses from the drop in POST TELECOMMU's long position.| Elcom Technology vs. Tin Nghia Industrial | Elcom Technology vs. Global Electrical Technology | Elcom Technology vs. Hochiminh City Metal | Elcom Technology vs. Sea Air Freight |
| POST TELECOMMU vs. Century Synthetic Fiber | POST TELECOMMU vs. Telecoms Informatics JSC | POST TELECOMMU vs. Elcom Technology Communications | POST TELECOMMU vs. Petrolimex Insurance Corp |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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