Correlation Between Delta Electronics and Hon Hai
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and Hon Hai 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 Delta Electronics and Hon Hai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Electronics and Hon Hai Precision, you can compare the effects of market volatilities on Delta Electronics and Hon Hai 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 Delta Electronics with a short position of Hon Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and Hon Hai.
Diversification Opportunities for Delta Electronics and Hon Hai
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Delta and Hon is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics and Hon Hai Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hon Hai Precision and Delta Electronics 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 Delta Electronics are associated (or correlated) with Hon Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hon Hai Precision has no effect on the direction of Delta Electronics i.e., Delta Electronics and Hon Hai go up and down completely randomly.
Pair Corralation between Delta Electronics and Hon Hai
Assuming the 90 days trading horizon Delta Electronics is expected to generate 1.17 times more return on investment than Hon Hai. However, Delta Electronics is 1.17 times more volatile than Hon Hai Precision. It trades about 0.04 of its potential returns per unit of risk. Hon Hai Precision is currently generating about -0.1 per unit of risk. If you would invest 41,650 in Delta Electronics on October 20, 2024 and sell it today you would earn a total of 550.00 from holding Delta Electronics or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Electronics vs. Hon Hai Precision
Performance |
| Timeline |
| Delta Electronics |
| Hon Hai Precision |
Delta Electronics and Hon Hai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and Hon Hai
The main advantage of trading using opposite Delta Electronics and Hon Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, Hon Hai 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 Hon Hai will offset losses from the drop in Hon Hai's long position.| Delta Electronics vs. Quanta Computer | Delta Electronics vs. Hon Hai Precision | Delta Electronics vs. United Microelectronics | Delta Electronics vs. LARGAN Precision Co |
| Hon Hai vs. United Microelectronics | Hon Hai vs. MediaTek | Hon Hai vs. Chunghwa Telecom Co | Hon Hai vs. Delta Electronics |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Correlations Find global opportunities by holding instruments from different markets |