Correlation Between ECS ICT and XL Holdings
Can any of the company-specific risk be diversified away by investing in both ECS ICT and XL Holdings 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 ECS ICT and XL Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECS ICT Bhd and XL Holdings Bhd, you can compare the effects of market volatilities on ECS ICT and XL Holdings 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 ECS ICT with a short position of XL Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECS ICT and XL Holdings.
Diversification Opportunities for ECS ICT and XL Holdings
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ECS and 7121 is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding ECS ICT Bhd and XL Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XL Holdings Bhd and ECS ICT 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 ECS ICT Bhd are associated (or correlated) with XL Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XL Holdings Bhd has no effect on the direction of ECS ICT i.e., ECS ICT and XL Holdings go up and down completely randomly.
Pair Corralation between ECS ICT and XL Holdings
Assuming the 90 days trading horizon ECS ICT Bhd is expected to generate 4.02 times more return on investment than XL Holdings. However, ECS ICT is 4.02 times more volatile than XL Holdings Bhd. It trades about 0.07 of its potential returns per unit of risk. XL Holdings Bhd is currently generating about 0.22 per unit of risk. If you would invest 383.00 in ECS ICT Bhd on September 24, 2024 and sell it today you would earn a total of 8.00 from holding ECS ICT Bhd or generate 2.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ECS ICT Bhd vs. XL Holdings Bhd
Performance |
Timeline |
ECS ICT Bhd |
XL Holdings Bhd |
ECS ICT and XL Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ECS ICT and XL Holdings
The main advantage of trading using opposite ECS ICT and XL Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECS ICT position performs unexpectedly, XL Holdings 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 XL Holdings will offset losses from the drop in XL Holdings' long position.ECS ICT vs. Binasat Communications Bhd | ECS ICT vs. Cosmos Technology International | ECS ICT vs. Central Industrial Corp | ECS ICT vs. Greatech Technology Bhd |
XL Holdings vs. Malayan Banking Bhd | XL Holdings vs. Public Bank Bhd | XL Holdings vs. Petronas Chemicals Group | XL Holdings vs. Tenaga Nasional Bhd |
Check out your portfolio center.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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Share Portfolio Track or share privately all of your investments from the convenience of any device |