Correlation Between Delta Electronics and Avalue Technology
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and Avalue 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 Delta Electronics and Avalue Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Electronics and Avalue Technology, you can compare the effects of market volatilities on Delta Electronics and Avalue 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 Delta Electronics with a short position of Avalue Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and Avalue Technology.
Diversification Opportunities for Delta Electronics and Avalue Technology
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Delta and Avalue is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics and Avalue Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avalue Technology 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 Avalue Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avalue Technology has no effect on the direction of Delta Electronics i.e., Delta Electronics and Avalue Technology go up and down completely randomly.
Pair Corralation between Delta Electronics and Avalue Technology
Assuming the 90 days trading horizon Delta Electronics is expected to generate 0.77 times more return on investment than Avalue Technology. However, Delta Electronics is 1.29 times less risky than Avalue Technology. It trades about 0.15 of its potential returns per unit of risk. Avalue Technology is currently generating about -0.03 per unit of risk. If you would invest 39,700 in Delta Electronics on September 13, 2024 and sell it today you would earn a total of 1,750 from holding Delta Electronics or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Electronics vs. Avalue Technology
Performance |
| Timeline |
| Delta Electronics |
| Avalue Technology |
Delta Electronics and Avalue Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and Avalue Technology
The main advantage of trading using opposite Delta Electronics and Avalue Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, Avalue 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 Avalue Technology will offset losses from the drop in Avalue Technology'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 |
| Avalue Technology vs. Qisda Corp | Avalue Technology vs. Quanta Computer | Avalue Technology vs. Wistron Corp | Avalue Technology 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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