Correlation Between Viet Thanh and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both Viet Thanh 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 Viet Thanh and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viet Thanh Plastic and Elcom Technology Communications, you can compare the effects of market volatilities on Viet Thanh 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 Viet Thanh with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viet Thanh and Elcom Technology.
Diversification Opportunities for Viet Thanh and Elcom Technology
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Viet and Elcom is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Viet Thanh Plastic 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 Viet Thanh 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 Viet Thanh Plastic 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 Viet Thanh i.e., Viet Thanh and Elcom Technology go up and down completely randomly.
Pair Corralation between Viet Thanh and Elcom Technology
Assuming the 90 days trading horizon Viet Thanh Plastic is expected to generate 0.87 times more return on investment than Elcom Technology. However, Viet Thanh Plastic is 1.14 times less risky than Elcom Technology. It trades about 0.13 of its potential returns per unit of risk. Elcom Technology Communications is currently generating about 0.03 per unit of risk. If you would invest 1,570,000 in Viet Thanh Plastic on October 17, 2024 and sell it today you would earn a total of 110,000 from holding Viet Thanh Plastic or generate 7.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viet Thanh Plastic vs. Elcom Technology Communication
Performance |
| Timeline |
| Viet Thanh Plastic |
| Elcom Technology Com |
Viet Thanh and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viet Thanh and Elcom Technology
The main advantage of trading using opposite Viet Thanh and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viet Thanh 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.| Viet Thanh vs. Vnsteel Vicasa JSC | Viet Thanh vs. Dong A Hotel | Viet Thanh vs. Nam Kim Steel | Viet Thanh vs. Sea Air Freight |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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