Correlation Between Hai An and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both Hai An and Elcom Technology 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 Hai An and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hai An Transport and Elcom Technology Communications, you can compare the effects of market volatilities on Hai An and Elcom Technology 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 Hai An with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hai An and Elcom Technology.
Diversification Opportunities for Hai An and Elcom Technology
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hai and Elcom is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hai An Transport and Elcom Technology Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elcom Technology Com and Hai An 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 Hai An Transport are associated (or correlated) with Elcom Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elcom Technology Com has no effect on the direction of Hai An i.e., Hai An and Elcom Technology go up and down completely randomly.
Pair Corralation between Hai An and Elcom Technology
Assuming the 90 days trading horizon Hai An is expected to generate 1.06 times less return on investment than Elcom Technology. But when comparing it to its historical volatility, Hai An Transport is 1.09 times less risky than Elcom Technology. It trades about 0.08 of its potential returns per unit of risk. Elcom Technology Communications is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,250,000 in Elcom Technology Communications on October 27, 2024 and sell it today you would earn a total of 1,535,000 from holding Elcom Technology Communications or generate 122.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hai An Transport vs. Elcom Technology Communication
Performance |
| Timeline |
| Hai An Transport |
| Elcom Technology Com |
Hai An and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hai An and Elcom Technology
The main advantage of trading using opposite Hai An and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hai An position performs unexpectedly, Elcom Technology 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 Elcom Technology will offset losses from the drop in Elcom Technology's long position.| Hai An vs. HVC Investment and | Hai An vs. Vina2 Investment and | Hai An vs. Vietnam JSCmmercial Bank | Hai An vs. Vu Dang Investment |
| Elcom Technology vs. FIT INVEST JSC | Elcom Technology vs. Damsan JSC | Elcom Technology vs. An Phat Plastic | Elcom Technology 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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