Correlation Between Delta Asia and Brighten Optix
Can any of the company-specific risk be diversified away by investing in both Delta Asia and Brighten Optix 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 Asia and Brighten Optix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Asia International and Brighten Optix, you can compare the effects of market volatilities on Delta Asia and Brighten Optix 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 Asia with a short position of Brighten Optix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Asia and Brighten Optix.
Diversification Opportunities for Delta Asia and Brighten Optix
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Delta and Brighten is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Delta Asia International and Brighten Optix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brighten Optix and Delta Asia 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 Asia International are associated (or correlated) with Brighten Optix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brighten Optix has no effect on the direction of Delta Asia i.e., Delta Asia and Brighten Optix go up and down completely randomly.
Pair Corralation between Delta Asia and Brighten Optix
Assuming the 90 days trading horizon Delta Asia International is expected to generate 1.12 times more return on investment than Brighten Optix. However, Delta Asia is 1.12 times more volatile than Brighten Optix. It trades about 0.03 of its potential returns per unit of risk. Brighten Optix is currently generating about -0.07 per unit of risk. If you would invest 25,000 in Delta Asia International on September 1, 2024 and sell it today you would earn a total of 2,400 from holding Delta Asia International or generate 9.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.62% |
| Values | Daily Returns |
Delta Asia International vs. Brighten Optix
Performance |
| Timeline |
| Delta Asia International |
| Brighten Optix |
Delta Asia and Brighten Optix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Asia and Brighten Optix
The main advantage of trading using opposite Delta Asia and Brighten Optix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Asia position performs unexpectedly, Brighten Optix 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 Brighten Optix will offset losses from the drop in Brighten Optix's long position.| Delta Asia vs. Universal Vision Biotechnology | Delta Asia vs. Excelsior Medical Co | Delta Asia vs. Hi Clearance | Delta Asia vs. Brighten Optix |
| Brighten Optix vs. Universal Vision Biotechnology | Brighten Optix vs. Excelsior Medical Co | Brighten Optix vs. Hi Clearance | Brighten Optix vs. United Orthopedic |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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