Correlation Between Hanoi Plastics and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both Hanoi Plastics 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 Hanoi Plastics and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanoi Plastics JSC and Elcom Technology Communications, you can compare the effects of market volatilities on Hanoi Plastics 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 Hanoi Plastics with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Plastics and Elcom Technology.
Diversification Opportunities for Hanoi Plastics and Elcom Technology
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanoi and Elcom is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Plastics JSC 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 Hanoi Plastics 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 Hanoi Plastics JSC 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 Hanoi Plastics i.e., Hanoi Plastics and Elcom Technology go up and down completely randomly.
Pair Corralation between Hanoi Plastics and Elcom Technology
Assuming the 90 days trading horizon Hanoi Plastics JSC is expected to generate 0.69 times more return on investment than Elcom Technology. However, Hanoi Plastics JSC is 1.44 times less risky than Elcom Technology. It trades about -0.1 of its potential returns per unit of risk. Elcom Technology Communications is currently generating about -0.14 per unit of risk. If you would invest 1,315,000 in Hanoi Plastics JSC on October 17, 2024 and sell it today you would lose (25,000) from holding Hanoi Plastics JSC or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanoi Plastics JSC vs. Elcom Technology Communication
Performance |
| Timeline |
| Hanoi Plastics JSC |
| Elcom Technology Com |
Hanoi Plastics and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Plastics and Elcom Technology
The main advantage of trading using opposite Hanoi Plastics and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Plastics 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.| Hanoi Plastics vs. Construction And Investment | Hanoi Plastics vs. TDT Investment and | Hanoi Plastics vs. SMC Investment Trading | Hanoi Plastics vs. Tng Investment And |
| Elcom Technology vs. Hanoi Plastics JSC | Elcom Technology vs. Viet Thanh Plastic | Elcom Technology vs. Vietnam Petroleum Transport | Elcom Technology vs. PetroVietnam Drilling Well |
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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