Correlation Between Elcom Technology and Hcd Investment

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

Diversification Opportunities for Elcom Technology and Hcd Investment

0.64

Correlation Coefficient

Elcom Technology  Hcd Investment

Poor diversification

The 3 months correlation between Elcom and Hcd is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Elcom Technology Communication and Hcd Investment Producing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hcd Investment Producing 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 Hcd Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hcd Investment Producing has no effect on the direction of Elcom Technology i.e., Elcom Technology and Hcd Investment go up and down completely randomly.

Pair Corralation between Elcom Technology and Hcd Investment

Assuming the 90 days trading horizon Elcom Technology is expected to generate 1.39 times less return on investment than Hcd Investment. In addition to that, Elcom Technology is 1.07 times more volatile than Hcd Investment Producing. It trades about 0.08 of its total potential returns per unit of risk. Hcd Investment Producing is currently generating about 0.12 per unit of volatility. If you would invest  695,000  in Hcd Investment Producing on May 16, 2025 and sell it today you would earn a total of  73,000  from holding Hcd Investment Producing or generate 10.5% return on investment over 90 days.

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

Elcom Technology Communication  vs.  Hcd Investment Producing

Elcom Technology Com

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Elcom Technology Communications are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Elcom Technology may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Hcd Investment Producing

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Hcd Investment Producing are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Hcd Investment may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Elcom Technology and Hcd Investment

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

The idea behind Elcom Technology Communications and Hcd Investment Producing 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.