Correlation Between Elcom Technology and Tin Nghia
Can any of the company-specific risk be diversified away by investing in both Elcom Technology and Tin Nghia 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 Tin Nghia 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 Tin Nghia Industrial, you can compare the effects of market volatilities on Elcom Technology and Tin Nghia 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 Tin Nghia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and Tin Nghia.
Diversification Opportunities for Elcom Technology and Tin Nghia
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elcom and Tin is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and Tin Nghia Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tin Nghia Industrial 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 Tin Nghia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tin Nghia Industrial has no effect on the direction of Elcom Technology i.e., Elcom Technology and Tin Nghia go up and down completely randomly.
Pair Corralation between Elcom Technology and Tin Nghia
Assuming the 90 days trading horizon Elcom Technology Communications is expected to generate 1.23 times more return on investment than Tin Nghia. However, Elcom Technology is 1.23 times more volatile than Tin Nghia Industrial. It trades about 0.09 of its potential returns per unit of risk. Tin Nghia Industrial is currently generating about 0.05 per unit of risk. If you would invest 960,000 in Elcom Technology Communications on September 3, 2024 and sell it today you would earn a total of 1,660,000 from holding Elcom Technology Communications or generate 172.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elcom Technology Communication vs. Tin Nghia Industrial
Performance |
| Timeline |
| Elcom Technology Com |
| Tin Nghia Industrial |
Elcom Technology and Tin Nghia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elcom Technology and Tin Nghia
The main advantage of trading using opposite Elcom Technology and Tin Nghia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, Tin Nghia 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 Tin Nghia will offset losses from the drop in Tin Nghia'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 |
| Tin Nghia vs. Binh Duong Trade | Tin Nghia vs. Everland Investment JSC | Tin Nghia vs. MST Investment JSC | Tin Nghia vs. Thanh Dat Investment |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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