Correlation Between Van Dien and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both Van Dien 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 Van Dien and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Van Dien Fused and Elcom Technology Communications, you can compare the effects of market volatilities on Van Dien 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 Van Dien with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Van Dien and Elcom Technology.
Diversification Opportunities for Van Dien and Elcom Technology
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Van and Elcom is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Van Dien Fused 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 Van Dien 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 Van Dien Fused 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 Van Dien i.e., Van Dien and Elcom Technology go up and down completely randomly.
Pair Corralation between Van Dien and Elcom Technology
Assuming the 90 days trading horizon Van Dien Fused is expected to under-perform the Elcom Technology. In addition to that, Van Dien is 1.88 times more volatile than Elcom Technology Communications. It trades about -0.13 of its total potential returns per unit of risk. Elcom Technology Communications is currently generating about 0.07 per unit of volatility. If you would invest 2,690,000 in Elcom Technology Communications on September 14, 2024 and sell it today you would earn a total of 60,000 from holding Elcom Technology Communications or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 45.45% |
| Values | Daily Returns |
Van Dien Fused vs. Elcom Technology Communication
Performance |
| Timeline |
| Van Dien Fused |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Elcom Technology Com |
Van Dien and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Van Dien and Elcom Technology
The main advantage of trading using opposite Van Dien and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Van Dien 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.| Van Dien vs. Elcom Technology Communications | Van Dien vs. Materials Petroleum JSC | Van Dien vs. Danang Rubber JSC | Van Dien vs. FPT Digital Retail |
| Elcom Technology vs. Telecoms Informatics JSC | Elcom Technology vs. Bich Chi Food | Elcom Technology vs. Development Investment Construction | Elcom Technology vs. PV2 Investment JSC |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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