Correlation Between Elcom Technology and Vu Dang
Can any of the company-specific risk be diversified away by investing in both Elcom Technology and Vu Dang 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 Vu Dang 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 Vu Dang Investment, you can compare the effects of market volatilities on Elcom Technology and Vu Dang 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 Vu Dang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and Vu Dang.
Diversification Opportunities for Elcom Technology and Vu Dang
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elcom and SVD is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and Vu Dang Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vu Dang Investment 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 Vu Dang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vu Dang Investment has no effect on the direction of Elcom Technology i.e., Elcom Technology and Vu Dang go up and down completely randomly.
Pair Corralation between Elcom Technology and Vu Dang
Assuming the 90 days trading horizon Elcom Technology Communications is expected to generate 1.09 times more return on investment than Vu Dang. However, Elcom Technology is 1.09 times more volatile than Vu Dang Investment. It trades about 0.09 of its potential returns per unit of risk. Vu Dang Investment is currently generating about 0.01 per unit of risk. If you would invest 950,000 in Elcom Technology Communications on August 29, 2024 and sell it today you would earn a total of 1,595,000 from holding Elcom Technology Communications or generate 167.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elcom Technology Communication vs. Vu Dang Investment
Performance |
| Timeline |
| Elcom Technology Com |
| Vu Dang Investment |
Elcom Technology and Vu Dang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elcom Technology and Vu Dang
The main advantage of trading using opposite Elcom Technology and Vu Dang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, Vu Dang 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 Vu Dang will offset losses from the drop in Vu Dang'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 |
| Vu Dang vs. FIT INVEST JSC | Vu Dang vs. Damsan JSC | Vu Dang vs. An Phat Plastic | Vu Dang 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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