Correlation Between Elcom Technology and POT

Can any of the company-specific risk be diversified away by investing in both Elcom Technology and POT 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 POT 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 PostTelecommunication Equipment, you can compare the effects of market volatilities on Elcom Technology and POT 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 POT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom Technology and POT.

Diversification Opportunities for Elcom Technology and POT

-0.32

Correlation Coefficient

Elcom Technology  POT

Very good diversification

The 3 months correlation between Elcom and POT is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and PostTelecommunication Equipmen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PostTelecommunication 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 POT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PostTelecommunication has no effect on the direction of Elcom Technology i.e., Elcom Technology and POT go up and down completely randomly.

Pair Corralation between Elcom Technology and POT

Assuming the 90 days trading horizon Elcom Technology Communications is expected to under-perform the POT. But the stock apears to be less risky and, when comparing its historical volatility, Elcom Technology Communications is 1.89 times less risky than POT. The stock trades about -0.08 of its potential returns per unit of risk. The PostTelecommunication Equipment is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,620,000  in PostTelecommunication Equipment on December 26, 2024 and sell it today you would earn a total of  120,000  from holding PostTelecommunication Equipment or generate 7.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	70.69%
Values	Daily Returns

Elcom Technology Communication  vs.  PostTelecommunication Equipmen

Elcom Technology Com

Risk-Adjusted Performance

Very Weak

Over the last 90 days Elcom Technology Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

PostTelecommunication

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PostTelecommunication Equipment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, POT displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elcom Technology and POT

The main advantage of trading using opposite Elcom Technology and POT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom Technology position performs unexpectedly, POT 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 POT will offset losses from the drop in POT's long position.

The idea behind Elcom Technology Communications and PostTelecommunication Equipment 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 CEOs Directory module to screen CEOs from public companies around the world.