Correlation Between Streamwide and Delfingen
Can any of the company-specific risk be diversified away by investing in both Streamwide and Delfingen 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 Streamwide and Delfingen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Streamwide and Delfingen, you can compare the effects of market volatilities on Streamwide and Delfingen 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 Streamwide with a short position of Delfingen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Streamwide and Delfingen.
Diversification Opportunities for Streamwide and Delfingen
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Streamwide and Delfingen is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Streamwide and Delfingen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delfingen and Streamwide 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 Streamwide are associated (or correlated) with Delfingen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delfingen has no effect on the direction of Streamwide i.e., Streamwide and Delfingen go up and down completely randomly.
Pair Corralation between Streamwide and Delfingen
Assuming the 90 days trading horizon Streamwide is expected to generate 1.2 times less return on investment than Delfingen. But when comparing it to its historical volatility, Streamwide is 1.32 times less risky than Delfingen. It trades about 0.15 of its potential returns per unit of risk. Delfingen is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,340 in Delfingen on October 23, 2024 and sell it today you would earn a total of 225.00 from holding Delfingen or generate 16.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Streamwide vs. Delfingen
Performance |
| Timeline |
| Streamwide |
| Delfingen |
Streamwide and Delfingen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Streamwide and Delfingen
The main advantage of trading using opposite Streamwide and Delfingen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Streamwide position performs unexpectedly, Delfingen 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 Delfingen will offset losses from the drop in Delfingen's long position.| Streamwide vs. Sidetrade | Streamwide vs. Esker SA | Streamwide vs. Xilam Animation | Streamwide vs. Ekinops SA |
| Delfingen vs. Akwel SA | Delfingen vs. Groupe Guillin SA | Delfingen vs. Burelle SA | Delfingen vs. SA Catana Group |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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