Correlation Between Delta Electronics and Asia Tech
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and Asia Tech 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 Asia Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Electronics and Asia Tech Image, you can compare the effects of market volatilities on Delta Electronics and Asia Tech 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 Asia Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and Asia Tech.
Diversification Opportunities for Delta Electronics and Asia Tech
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Delta and Asia is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics and Asia Tech Image in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Tech Image 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 Asia Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Tech Image has no effect on the direction of Delta Electronics i.e., Delta Electronics and Asia Tech go up and down completely randomly.
Pair Corralation between Delta Electronics and Asia Tech
Assuming the 90 days trading horizon Delta Electronics is expected to generate 0.81 times more return on investment than Asia Tech. However, Delta Electronics is 1.24 times less risky than Asia Tech. It trades about 0.11 of its potential returns per unit of risk. Asia Tech Image is currently generating about -0.11 per unit of risk. If you would invest 40,100 in Delta Electronics on September 12, 2024 and sell it today you would earn a total of 1,350 from holding Delta Electronics or generate 3.37% 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. Asia Tech Image
Performance |
| Timeline |
| Delta Electronics |
| Asia Tech Image |
Delta Electronics and Asia Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and Asia Tech
The main advantage of trading using opposite Delta Electronics and Asia Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, Asia Tech 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 Asia Tech will offset losses from the drop in Asia Tech's long position.| Delta Electronics vs. AU Optronics | Delta Electronics vs. Innolux Corp | Delta Electronics vs. Ruentex Development Co | Delta Electronics vs. WiseChip Semiconductor |
| Asia Tech vs. ANJI Technology Co | Asia Tech vs. Emerging Display Technologies | Asia Tech vs. U Tech Media Corp | Asia Tech vs. Ruentex Development Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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