Correlation Between Petrovietnam Technical and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both Petrovietnam Technical and Elcom Technology 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 Petrovietnam Technical and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrovietnam Technical Services and Elcom Technology Communications, you can compare the effects of market volatilities on Petrovietnam Technical and Elcom Technology 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 Petrovietnam Technical with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrovietnam Technical and Elcom Technology.
Diversification Opportunities for Petrovietnam Technical and Elcom Technology
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Petrovietnam and Elcom is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Petrovietnam Technical Service and Elcom Technology Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elcom Technology Com and Petrovietnam Technical 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 Petrovietnam Technical Services are associated (or correlated) with Elcom Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elcom Technology Com has no effect on the direction of Petrovietnam Technical i.e., Petrovietnam Technical and Elcom Technology go up and down completely randomly.
Pair Corralation between Petrovietnam Technical and Elcom Technology
Assuming the 90 days trading horizon Petrovietnam Technical Services is expected to under-perform the Elcom Technology. But the stock apears to be less risky and, when comparing its historical volatility, Petrovietnam Technical Services is 1.2 times less risky than Elcom Technology. The stock trades about -0.19 of its potential returns per unit of risk. The Elcom Technology Communications is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,355,000 in Elcom Technology Communications on September 12, 2024 and sell it today you would earn a total of 305,000 from holding Elcom Technology Communications or generate 12.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Petrovietnam Technical Service vs. Elcom Technology Communication
Performance |
Timeline |
Petrovietnam Technical |
Elcom Technology Com |
Petrovietnam Technical and Elcom Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Petrovietnam Technical and Elcom Technology
The main advantage of trading using opposite Petrovietnam Technical and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrovietnam Technical position performs unexpectedly, Elcom Technology 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 Elcom Technology will offset losses from the drop in Elcom Technology's long position.Petrovietnam Technical vs. Construction And Investment | Petrovietnam Technical vs. VTC Telecommunications JSC | Petrovietnam Technical vs. Sao Ta Foods | Petrovietnam Technical vs. LDG Investment JSC |
Elcom Technology vs. FIT INVEST JSC | Elcom Technology vs. Damsan JSC | Elcom Technology vs. An Phat Plastic | Elcom Technology vs. Alphanam ME |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |