Correlation Between Elcom International and Technology Portfolio

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

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

Diversification Opportunities for Elcom International and Technology Portfolio

0.0

Correlation Coefficient

Elcom International  Technology Portfolio

Pay attention - limited upside

The 3 months correlation between Elcom and Technology is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elcom International and Technology Portfolio Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technology Portfolio and Elcom International 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 International are associated (or correlated) with Technology Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technology Portfolio has no effect on the direction of Elcom International i.e., Elcom International and Technology Portfolio go up and down completely randomly.

Pair Corralation between Elcom International and Technology Portfolio

If you would invest (100.00) in Elcom International on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Elcom International or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Elcom International  vs.  Technology Portfolio Technolog

Elcom International

Risk-Adjusted Performance

Very Weak

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

Technology Portfolio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Technology Portfolio Technology has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Elcom International and Technology Portfolio

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

The idea behind Elcom International and Technology Portfolio Technology 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.