Correlation Between Advanced Info and Delta Electronics
Can any of the company-specific risk be diversified away by investing in both Advanced Info and Delta Electronics 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 Advanced Info and Delta Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Info Service and Delta Electronics Public, you can compare the effects of market volatilities on Advanced Info and Delta Electronics 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 Advanced Info with a short position of Delta Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Info and Delta Electronics.
Diversification Opportunities for Advanced Info and Delta Electronics
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Advanced and Delta is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Info Service and Delta Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Electronics Public and Advanced Info 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 Advanced Info Service are associated (or correlated) with Delta Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Electronics Public has no effect on the direction of Advanced Info i.e., Advanced Info and Delta Electronics go up and down completely randomly.
Pair Corralation between Advanced Info and Delta Electronics
Assuming the 90 days trading horizon Advanced Info Service is expected to generate 0.51 times more return on investment than Delta Electronics. However, Advanced Info Service is 1.96 times less risky than Delta Electronics. It trades about 0.02 of its potential returns per unit of risk. Delta Electronics Public is currently generating about -0.12 per unit of risk. If you would invest 28,500 in Advanced Info Service on November 2, 2024 and sell it today you would earn a total of 100.00 from holding Advanced Info Service or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Info Service vs. Delta Electronics Public
Performance |
| Timeline |
| Advanced Info Service |
| Delta Electronics Public |
Advanced Info and Delta Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Info and Delta Electronics
The main advantage of trading using opposite Advanced Info and Delta Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Info position performs unexpectedly, Delta Electronics 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 Electronics will offset losses from the drop in Delta Electronics' long position.| Advanced Info vs. PTT Public | Advanced Info vs. CP ALL Public | Advanced Info vs. Kasikornbank Public | Advanced Info vs. Bangkok Bank Public |
| Delta Electronics vs. Airports of Thailand | Delta Electronics vs. Hana Microelectronics Public | Delta Electronics vs. Advanced Info Service | Delta Electronics vs. Kasikornbank Public |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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