Correlation Between Elcom Technology and Thu Duc

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

Diversification Opportunities for Elcom Technology and Thu Duc

-0.24

Correlation Coefficient

Elcom Technology  Thu Duc

Very good diversification

The 3 months correlation between Elcom and Thu is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and Thu Duc TradingImport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thu Duc TradingImport 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 Thu Duc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thu Duc TradingImport has no effect on the direction of Elcom Technology i.e., Elcom Technology and Thu Duc go up and down completely randomly.

Pair Corralation between Elcom Technology and Thu Duc

Assuming the 90 days trading horizon Elcom Technology Communications is expected to under-perform the Thu Duc. In addition to that, Elcom Technology is 1.18 times more volatile than Thu Duc TradingImport. It trades about -0.06 of its total potential returns per unit of risk. Thu Duc TradingImport is currently generating about 0.09 per unit of volatility. If you would invest  810,000  in Thu Duc TradingImport on December 19, 2024 and sell it today you would earn a total of  40,000  from holding Thu Duc TradingImport or generate 4.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	47.46%
Values	Daily Returns

Elcom Technology Communication  vs.  Thu Duc TradingImport

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 latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Thu Duc TradingImport

Risk-Adjusted Performance

OK

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

Pair Trading with Elcom Technology and Thu Duc

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

The idea behind Elcom Technology Communications and Thu Duc TradingImport 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.