Correlation Between Medtecs International and Delta Asia
Can any of the company-specific risk be diversified away by investing in both Medtecs International and Delta Asia 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 Medtecs International and Delta Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medtecs International and Delta Asia International, you can compare the effects of market volatilities on Medtecs International and Delta Asia 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 Medtecs International with a short position of Delta Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medtecs International and Delta Asia.
Diversification Opportunities for Medtecs International and Delta Asia
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Medtecs and Delta is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Medtecs International and Delta Asia International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Asia International and Medtecs International 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 Medtecs International are associated (or correlated) with Delta Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Asia International has no effect on the direction of Medtecs International i.e., Medtecs International and Delta Asia go up and down completely randomly.
Pair Corralation between Medtecs International and Delta Asia
Assuming the 90 days trading horizon Medtecs International is expected to under-perform the Delta Asia. In addition to that, Medtecs International is 2.04 times more volatile than Delta Asia International. It trades about -0.16 of its total potential returns per unit of risk. Delta Asia International is currently generating about 0.29 per unit of volatility. If you would invest 27,300 in Delta Asia International on November 27, 2024 and sell it today you would earn a total of 700.00 from holding Delta Asia International or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medtecs International vs. Delta Asia International
Performance |
| Timeline |
| Medtecs International |
| Delta Asia International |
Medtecs International and Delta Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medtecs International and Delta Asia
The main advantage of trading using opposite Medtecs International and Delta Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medtecs International position performs unexpectedly, Delta Asia 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 Delta Asia will offset losses from the drop in Delta Asia's long position.The idea behind Medtecs International and Delta Asia International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Delta Asia vs. TMP Steel | Delta Asia vs. Forest Water Environmental | Delta Asia vs. Great China Metal | Delta Asia vs. Thermaltake 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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