Correlation Between Delta Electronics and FineMat Applied
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and FineMat Applied 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 FineMat Applied into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Electronics and FineMat Applied Materials, you can compare the effects of market volatilities on Delta Electronics and FineMat Applied 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 FineMat Applied. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and FineMat Applied.
Diversification Opportunities for Delta Electronics and FineMat Applied
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Delta and FineMat is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics and FineMat Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FineMat Applied Materials 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 FineMat Applied. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FineMat Applied Materials has no effect on the direction of Delta Electronics i.e., Delta Electronics and FineMat Applied go up and down completely randomly.
Pair Corralation between Delta Electronics and FineMat Applied
Assuming the 90 days trading horizon Delta Electronics is expected to generate 0.81 times more return on investment than FineMat Applied. However, Delta Electronics is 1.23 times less risky than FineMat Applied. It trades about -0.2 of its potential returns per unit of risk. FineMat Applied Materials is currently generating about -0.22 per unit of risk. If you would invest 40,400 in Delta Electronics on September 1, 2024 and sell it today you would lose (2,300) from holding Delta Electronics or give up 5.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Electronics vs. FineMat Applied Materials
Performance |
| Timeline |
| Delta Electronics |
| FineMat Applied Materials |
Delta Electronics and FineMat Applied Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and FineMat Applied
The main advantage of trading using opposite Delta Electronics and FineMat Applied positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, FineMat Applied 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 FineMat Applied will offset losses from the drop in FineMat Applied'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 |
| FineMat Applied vs. Solomon Technology Corp | FineMat Applied vs. Chant Sincere Co | FineMat Applied vs. CviLux Corp | FineMat Applied vs. Shenmao Technology |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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