Correlation Between APG Securities and Elcom Technology

Can any of the company-specific risk be diversified away by investing in both APG Securities 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 APG Securities and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between APG Securities Joint and Elcom Technology Communications, you can compare the effects of market volatilities on APG Securities 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 APG Securities with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of APG Securities and Elcom Technology.

Diversification Opportunities for APG Securities and Elcom Technology

-0.17

Correlation Coefficient

APG Securities  Elcom Technology

Good diversification

The 3 months correlation between APG and Elcom is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding APG Securities Joint 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 APG Securities 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 APG Securities Joint 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 APG Securities i.e., APG Securities and Elcom Technology go up and down completely randomly.

Pair Corralation between APG Securities and Elcom Technology

Assuming the 90 days trading horizon APG Securities Joint is expected to generate 0.85 times more return on investment than Elcom Technology. However, APG Securities Joint is 1.18 times less risky than Elcom Technology. It trades about 0.46 of its potential returns per unit of risk. Elcom Technology Communications is currently generating about -0.05 per unit of risk. If you would invest  698,000  in APG Securities Joint on December 4, 2024 and sell it today you would earn a total of  212,000  from holding APG Securities Joint or generate 30.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

APG Securities Joint  vs.  Elcom Technology Communication

APG Securities Joint

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in APG Securities Joint are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, APG Securities is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Elcom Technology Com

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Elcom Technology Communications are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Elcom Technology is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with APG Securities and Elcom Technology

The main advantage of trading using opposite APG Securities and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APG Securities 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.

The idea behind APG Securities Joint and Elcom Technology Communications pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.