Correlation Between Delta Electronics and Advantech
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and Advantech 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 Advantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Electronics and Advantech Co, you can compare the effects of market volatilities on Delta Electronics and Advantech 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 Advantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and Advantech.
Diversification Opportunities for Delta Electronics and Advantech
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Delta and Advantech is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics and Advantech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantech 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 Advantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantech has no effect on the direction of Delta Electronics i.e., Delta Electronics and Advantech go up and down completely randomly.
Pair Corralation between Delta Electronics and Advantech
Assuming the 90 days trading horizon Delta Electronics is expected to generate 2.67 times less return on investment than Advantech. In addition to that, Delta Electronics is 1.11 times more volatile than Advantech Co. It trades about 0.07 of its total potential returns per unit of risk. Advantech Co is currently generating about 0.2 per unit of volatility. If you would invest 34,850 in Advantech Co on October 25, 2024 and sell it today you would earn a total of 3,050 from holding Advantech Co or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Electronics vs. Advantech Co
Performance |
| Timeline |
| Delta Electronics |
| Advantech |
Delta Electronics and Advantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and Advantech
The main advantage of trading using opposite Delta Electronics and Advantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, Advantech 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 Advantech will offset losses from the drop in Advantech'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 |
| Advantech vs. Delta Electronics | Advantech vs. Quanta Computer | Advantech vs. Realtek Semiconductor Corp | Advantech vs. President Chain Store |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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