Correlation Between Elcom Technology and RangDong Plastic
Can any of the company-specific risk be diversified away by investing in both Elcom Technology and RangDong Plastic 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 RangDong Plastic 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 RangDong Plastic JSC, you can compare the effects of market volatilities on Elcom Technology and RangDong Plastic 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 RangDong Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and RangDong Plastic.
Diversification Opportunities for Elcom Technology and RangDong Plastic
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elcom and RangDong is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and RangDong Plastic JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RangDong Plastic 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 RangDong Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RangDong Plastic JSC has no effect on the direction of Elcom Technology i.e., Elcom Technology and RangDong Plastic go up and down completely randomly.
Pair Corralation between Elcom Technology and RangDong Plastic
Assuming the 90 days trading horizon Elcom Technology Communications is expected to generate 0.49 times more return on investment than RangDong Plastic. However, Elcom Technology Communications is 2.04 times less risky than RangDong Plastic. It trades about 0.12 of its potential returns per unit of risk. RangDong Plastic JSC is currently generating about -0.45 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 | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Elcom Technology Communication vs. RangDong Plastic JSC
Performance |
| Timeline |
| Elcom Technology Com |
| RangDong Plastic JSC |
Elcom Technology and RangDong Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elcom Technology and RangDong Plastic
The main advantage of trading using opposite Elcom Technology and RangDong Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, RangDong Plastic 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 RangDong Plastic will offset losses from the drop in RangDong Plastic'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 |
| RangDong Plastic vs. FIT INVEST JSC | RangDong Plastic vs. Damsan JSC | RangDong Plastic vs. An Phat Plastic | RangDong Plastic vs. Alphanam ME |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |