Correlation Between Elcom Technology and FIT INVEST

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

Diversification Opportunities for Elcom Technology and FIT INVEST

0.48

Correlation Coefficient

Elcom Technology  FIT INVEST

Very weak diversification

The 3 months correlation between Elcom and FIT is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and FIT INVEST JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIT INVEST JSC 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 FIT INVEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIT INVEST JSC has no effect on the direction of Elcom Technology i.e., Elcom Technology and FIT INVEST go up and down completely randomly.

Pair Corralation between Elcom Technology and FIT INVEST

Assuming the 90 days trading horizon Elcom Technology is expected to generate 8.5 times less return on investment than FIT INVEST. But when comparing it to its historical volatility, Elcom Technology Communications is 1.55 times less risky than FIT INVEST. It trades about 0.02 of its potential returns per unit of risk. FIT INVEST JSC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  437,000  in FIT INVEST JSC on June 30, 2025 and sell it today you would earn a total of  54,000  from holding FIT INVEST JSC or generate 12.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Elcom Technology Communication  vs.  FIT INVEST JSC

Elcom Technology Com

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Elcom Technology Communications are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Elcom Technology is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

FIT INVEST JSC

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in FIT INVEST JSC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, FIT INVEST displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elcom Technology and FIT INVEST

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

The idea behind Elcom Technology Communications and FIT INVEST JSC 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.