Correlation Between Elcom Technology and Transport
Can any of the company-specific risk be diversified away by investing in both Elcom Technology and Transport 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 Transport 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 Transport and Industry, you can compare the effects of market volatilities on Elcom Technology and Transport 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 Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and Transport.
Diversification Opportunities for Elcom Technology and Transport
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elcom and Transport is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and Transport and Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport and Industry 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 Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport and Industry has no effect on the direction of Elcom Technology i.e., Elcom Technology and Transport go up and down completely randomly.
Pair Corralation between Elcom Technology and Transport
Assuming the 90 days trading horizon Elcom Technology Communications is expected to generate 0.36 times more return on investment than Transport. However, Elcom Technology Communications is 2.78 times less risky than Transport. It trades about -0.01 of its potential returns per unit of risk. Transport and Industry is currently generating about -0.21 per unit of risk. If you would invest 2,800,000 in Elcom Technology Communications on September 3, 2024 and sell it today you would lose (155,000) from holding Elcom Technology Communications or give up 5.54% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Elcom Technology Communication vs. Transport and Industry
Performance |
Timeline |
Elcom Technology Com |
Transport and Industry |
Elcom Technology and Transport Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Elcom Technology and Transport
The main advantage of trading using opposite Elcom Technology and Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, Transport 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 Transport will offset losses from the drop in Transport'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 |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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