Correlation Between Delta Electronics and Silicon Power
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and Silicon Power 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 Silicon Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Electronics and Silicon Power Computer, you can compare the effects of market volatilities on Delta Electronics and Silicon Power 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 Silicon Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and Silicon Power.
Diversification Opportunities for Delta Electronics and Silicon Power
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Delta and Silicon is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics and Silicon Power Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Power Computer 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 Silicon Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Power Computer has no effect on the direction of Delta Electronics i.e., Delta Electronics and Silicon Power go up and down completely randomly.
Pair Corralation between Delta Electronics and Silicon Power
Assuming the 90 days trading horizon Delta Electronics is expected to generate 0.73 times more return on investment than Silicon Power. However, Delta Electronics is 1.37 times less risky than Silicon Power. It trades about 0.15 of its potential returns per unit of risk. Silicon Power Computer is currently generating about 0.02 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. Silicon Power Computer
Performance |
| Timeline |
| Delta Electronics |
| Silicon Power Computer |
Delta Electronics and Silicon Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and Silicon Power
The main advantage of trading using opposite Delta Electronics and Silicon Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, Silicon Power 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 Silicon Power will offset losses from the drop in Silicon Power'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 |
| Silicon Power vs. Qisda Corp | Silicon Power vs. Quanta Computer | Silicon Power vs. Wistron Corp | Silicon Power 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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