Correlation Between Delta Electronics and AAEON Technology
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and AAEON 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 AAEON 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 AAEON Technology, you can compare the effects of market volatilities on Delta Electronics and AAEON 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 AAEON Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and AAEON Technology.
Diversification Opportunities for Delta Electronics and AAEON Technology
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Delta and AAEON is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics and AAEON Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAEON 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 AAEON Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAEON Technology has no effect on the direction of Delta Electronics i.e., Delta Electronics and AAEON Technology go up and down completely randomly.
Pair Corralation between Delta Electronics and AAEON Technology
Assuming the 90 days trading horizon Delta Electronics is expected to generate 0.78 times more return on investment than AAEON Technology. However, Delta Electronics is 1.28 times less risky than AAEON Technology. It trades about 0.13 of its potential returns per unit of risk. AAEON Technology is currently generating about -0.01 per unit of risk. If you would invest 39,900 in Delta Electronics on October 7, 2024 and sell it today you would earn a total of 1,500 from holding Delta Electronics or generate 3.76% 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. AAEON Technology
Performance |
| Timeline |
| Delta Electronics |
| AAEON Technology |
Delta Electronics and AAEON Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and AAEON Technology
The main advantage of trading using opposite Delta Electronics and AAEON Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, AAEON 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 AAEON Technology will offset losses from the drop in AAEON 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 |
| AAEON Technology vs. ADLINK Technology | AAEON Technology vs. Ennoconn Corp | AAEON Technology vs. Advantech Co | AAEON Technology vs. Flytech Technology 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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