Correlation Between IDJ FINANCIAL and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both IDJ FINANCIAL 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 IDJ FINANCIAL and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDJ FINANCIAL and Elcom Technology Communications, you can compare the effects of market volatilities on IDJ FINANCIAL 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 IDJ FINANCIAL with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDJ FINANCIAL and Elcom Technology.
Diversification Opportunities for IDJ FINANCIAL and Elcom Technology
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IDJ and Elcom is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding IDJ FINANCIAL 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 IDJ FINANCIAL 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 IDJ FINANCIAL 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 IDJ FINANCIAL i.e., IDJ FINANCIAL and Elcom Technology go up and down completely randomly.
Pair Corralation between IDJ FINANCIAL and Elcom Technology
Assuming the 90 days trading horizon IDJ FINANCIAL is expected to under-perform the Elcom Technology. In addition to that, IDJ FINANCIAL is 1.25 times more volatile than Elcom Technology Communications. It trades about -0.02 of its total potential returns per unit of risk. Elcom Technology Communications is currently generating about 0.0 per unit of volatility. If you would invest 2,840,000 in Elcom Technology Communications on September 13, 2024 and sell it today you would lose (95,000) from holding Elcom Technology Communications or give up 3.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IDJ FINANCIAL vs. Elcom Technology Communication
Performance |
| Timeline |
| IDJ FINANCIAL |
| Elcom Technology Com |
IDJ FINANCIAL and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDJ FINANCIAL and Elcom Technology
The main advantage of trading using opposite IDJ FINANCIAL and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDJ FINANCIAL 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.| IDJ FINANCIAL vs. FIT INVEST JSC | IDJ FINANCIAL vs. Damsan JSC | IDJ FINANCIAL vs. An Phat Plastic | IDJ FINANCIAL vs. Alphanam ME |
| Elcom Technology vs. FIT INVEST JSC | Elcom Technology vs. Damsan JSC | Elcom Technology vs. An Phat Plastic | Elcom Technology 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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