Correlation Between Ceres Power and Delta Electronics
Can any of the company-specific risk be diversified away by investing in both Ceres Power 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 Ceres Power and Delta Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceres Power Holdings and Delta Electronics Public, you can compare the effects of market volatilities on Ceres Power 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 Ceres Power with a short position of Delta Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceres Power and Delta Electronics.
Diversification Opportunities for Ceres Power and Delta Electronics
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ceres and Delta is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ceres Power Holdings 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 Ceres Power 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 Ceres Power Holdings 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 Ceres Power i.e., Ceres Power and Delta Electronics go up and down completely randomly.
Pair Corralation between Ceres Power and Delta Electronics
Assuming the 90 days trading horizon Ceres Power Holdings is expected to under-perform the Delta Electronics. In addition to that, Ceres Power is 1.27 times more volatile than Delta Electronics Public. It trades about 0.0 of its total potential returns per unit of risk. Delta Electronics Public is currently generating about 0.08 per unit of volatility. If you would invest 115.00 in Delta Electronics Public on September 5, 2024 and sell it today you would earn a total of 293.00 from holding Delta Electronics Public or generate 254.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ceres Power Holdings vs. Delta Electronics Public
Performance |
| Timeline |
| Ceres Power Holdings |
| Delta Electronics Public |
Ceres Power and Delta Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceres Power and Delta Electronics
The main advantage of trading using opposite Ceres Power and Delta Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceres Power 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.The idea behind Ceres Power Holdings and Delta Electronics Public 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.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 Stocks Directory module to find actively traded stocks across global markets.
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