Correlation Between Tienlen Steel and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both Tienlen Steel 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 Tienlen Steel and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tienlen Steel Corp and Elcom Technology Communications, you can compare the effects of market volatilities on Tienlen Steel 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 Tienlen Steel with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tienlen Steel and Elcom Technology.
Diversification Opportunities for Tienlen Steel and Elcom Technology
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tienlen and Elcom is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Tienlen Steel Corp 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 Tienlen Steel 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 Tienlen Steel Corp 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 Tienlen Steel i.e., Tienlen Steel and Elcom Technology go up and down completely randomly.
Pair Corralation between Tienlen Steel and Elcom Technology
Assuming the 90 days trading horizon Tienlen Steel Corp is expected to under-perform the Elcom Technology. But the stock apears to be less risky and, when comparing its historical volatility, Tienlen Steel Corp is 1.49 times less risky than Elcom Technology. The stock trades about -0.24 of its potential returns per unit of risk. The Elcom Technology Communications is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,730,000 in Elcom Technology Communications on November 3, 2024 and sell it today you would earn a total of 55,000 from holding Elcom Technology Communications or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tienlen Steel Corp vs. Elcom Technology Communication
Performance |
| Timeline |
| Tienlen Steel Corp |
| Elcom Technology Com |
Tienlen Steel and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tienlen Steel and Elcom Technology
The main advantage of trading using opposite Tienlen Steel and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tienlen Steel 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.| Tienlen Steel vs. Hanoi Beer Alcohol | Tienlen Steel vs. Techcom Vietnam REIT | Tienlen Steel vs. Saigon Viendong Technology | Tienlen Steel vs. Hochiminh City Metal |
| Elcom Technology vs. Song Hong Aluminum | Elcom Technology vs. Vietnam Technological And | Elcom Technology vs. Transport and Industry | Elcom Technology vs. Vietnam Rubber Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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