Correlation Between Elcom Technology and Agriculture Printing

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Can any of the company-specific risk be diversified away by investing in both Elcom Technology and Agriculture Printing 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 Elcom Technology and Agriculture Printing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elcom Technology Communications and Agriculture Printing and, you can compare the effects of market volatilities on Elcom Technology and Agriculture Printing 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 Elcom Technology with a short position of Agriculture Printing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and Agriculture Printing.

Diversification Opportunities for Elcom Technology and Agriculture Printing

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Elcom and Agriculture is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and Agriculture Printing and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agriculture Printing and and Elcom Technology 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 Elcom Technology Communications are associated (or correlated) with Agriculture Printing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agriculture Printing and has no effect on the direction of Elcom Technology i.e., Elcom Technology and Agriculture Printing go up and down completely randomly.

Pair Corralation between Elcom Technology and Agriculture Printing

Assuming the 90 days trading horizon Elcom Technology Communications is expected to generate 1.36 times more return on investment than Agriculture Printing. However, Elcom Technology is 1.36 times more volatile than Agriculture Printing and. It trades about 0.07 of its potential returns per unit of risk. Agriculture Printing and is currently generating about 0.05 per unit of risk. If you would invest  1,900,000  in Elcom Technology Communications on October 9, 2024 and sell it today you would earn a total of  745,000  from holding Elcom Technology Communications or generate 39.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy92.65%
ValuesDaily Returns

Elcom Technology Communication  vs.  Agriculture Printing and

 Performance 
       Timeline  
Elcom Technology Com 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Elcom Technology Communications are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Elcom Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Agriculture Printing and 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Agriculture Printing and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Agriculture Printing is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Elcom Technology and Agriculture Printing Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Elcom Technology and Agriculture Printing

The main advantage of trading using opposite Elcom Technology and Agriculture Printing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, Agriculture Printing 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 Agriculture Printing will offset losses from the drop in Agriculture Printing's long position.
The idea behind Elcom Technology Communications and Agriculture Printing and 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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