Correlation Between Din Capital and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both Din Capital 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 Din Capital and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Din Capital Investment and Elcom Technology Communications, you can compare the effects of market volatilities on Din Capital 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 Din Capital with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Din Capital and Elcom Technology.
Diversification Opportunities for Din Capital and Elcom Technology
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Din and Elcom is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital Investment 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 Din Capital 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 Din Capital Investment 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 Din Capital i.e., Din Capital and Elcom Technology go up and down completely randomly.
Pair Corralation between Din Capital and Elcom Technology
Assuming the 90 days trading horizon Din Capital is expected to generate 5.15 times less return on investment than Elcom Technology. But when comparing it to its historical volatility, Din Capital Investment is 1.08 times less risky than Elcom Technology. It trades about 0.02 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 1,130,000 in Elcom Technology Communications on October 9, 2024 and sell it today you would earn a total of 1,490,000 from holding Elcom Technology Communications or generate 131.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 93.89% |
| Values | Daily Returns |
Din Capital Investment vs. Elcom Technology Communication
Performance |
| Timeline |
| Din Capital Investment |
| Elcom Technology Com |
Din Capital and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Din Capital and Elcom Technology
The main advantage of trading using opposite Din Capital and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Din Capital 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.| Din Capital vs. FIT INVEST JSC | Din Capital vs. Damsan JSC | Din Capital vs. An Phat Plastic | Din Capital vs. APG Securities Joint |
| Elcom Technology vs. Investment and Industrial | Elcom Technology vs. Vina2 Investment and | Elcom Technology vs. Long An Food | Elcom Technology vs. SMC Investment Trading |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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