Correlation Between BES Engineering and Delpha Construction
Can any of the company-specific risk be diversified away by investing in both BES Engineering and Delpha Construction 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 BES Engineering and Delpha Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BES Engineering Co and Delpha Construction Co, you can compare the effects of market volatilities on BES Engineering and Delpha Construction 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 BES Engineering with a short position of Delpha Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of BES Engineering and Delpha Construction.
Diversification Opportunities for BES Engineering and Delpha Construction
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BES and Delpha is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding BES Engineering Co and Delpha Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delpha Construction and BES Engineering 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 BES Engineering Co are associated (or correlated) with Delpha Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delpha Construction has no effect on the direction of BES Engineering i.e., BES Engineering and Delpha Construction go up and down completely randomly.
Pair Corralation between BES Engineering and Delpha Construction
Assuming the 90 days trading horizon BES Engineering Co is expected to generate 1.08 times more return on investment than Delpha Construction. However, BES Engineering is 1.08 times more volatile than Delpha Construction Co. It trades about -0.1 of its potential returns per unit of risk. Delpha Construction Co is currently generating about -0.16 per unit of risk. If you would invest 1,150 in BES Engineering Co on January 16, 2025 and sell it today you would lose (120.00) from holding BES Engineering Co or give up 10.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BES Engineering Co vs. Delpha Construction Co
Performance |
| Timeline |
| BES Engineering |
| Delpha Construction |
BES Engineering and Delpha Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BES Engineering and Delpha Construction
The main advantage of trading using opposite BES Engineering and Delpha Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BES Engineering position performs unexpectedly, Delpha Construction 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 Delpha Construction will offset losses from the drop in Delpha Construction's long position.| BES Engineering vs. Delpha Construction Co | BES Engineering vs. Da Cin Construction Co | BES Engineering vs. Kuo Yang Construction |
| Delpha Construction vs. Huaku Development Co | Delpha Construction vs. Ruentex Development Co | Delpha Construction vs. Ruentex Industries | Delpha Construction vs. Taiwan Cement Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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