Correlation Between Binh Duong and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both Binh Duong 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 Binh Duong and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binh Duong Trade and Elcom Technology Communications, you can compare the effects of market volatilities on Binh Duong 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 Binh Duong with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binh Duong and Elcom Technology.
Diversification Opportunities for Binh Duong and Elcom Technology
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Binh and Elcom is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Binh Duong Trade 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 Binh Duong 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 Binh Duong Trade 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 Binh Duong i.e., Binh Duong and Elcom Technology go up and down completely randomly.
Pair Corralation between Binh Duong and Elcom Technology
Assuming the 90 days trading horizon Binh Duong is expected to generate 3.16 times less return on investment than Elcom Technology. But when comparing it to its historical volatility, Binh Duong Trade is 1.69 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 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,500,000 in Elcom Technology Communications on September 1, 2024 and sell it today you would earn a total of 120,000 from holding Elcom Technology Communications or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binh Duong Trade vs. Elcom Technology Communication
Performance |
| Timeline |
| Binh Duong Trade |
| Elcom Technology Com |
Binh Duong and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binh Duong and Elcom Technology
The main advantage of trading using opposite Binh Duong and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binh Duong 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.| Binh Duong vs. Elcom Technology Communications | Binh Duong vs. Post and Telecommunications | Binh Duong vs. South Basic Chemicals | Binh Duong vs. Saigon Telecommunication Technologies |
| Elcom Technology vs. Pha Lai Thermal | Elcom Technology vs. Hochiminh City Metal | Elcom Technology vs. Vietnam Petroleum Transport | Elcom Technology vs. Transport and Industry |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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