Correlation Between Commerzbank and Delta Technologies
Can any of the company-specific risk be diversified away by investing in both Commerzbank and Delta Technologies 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 Commerzbank and Delta Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerzbank AG and Delta Technologies Nyrt, you can compare the effects of market volatilities on Commerzbank and Delta Technologies 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 Commerzbank with a short position of Delta Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerzbank and Delta Technologies.
Diversification Opportunities for Commerzbank and Delta Technologies
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Commerzbank and Delta is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Commerzbank AG and Delta Technologies Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Technologies Nyrt and Commerzbank 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 Commerzbank AG are associated (or correlated) with Delta Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Technologies Nyrt has no effect on the direction of Commerzbank i.e., Commerzbank and Delta Technologies go up and down completely randomly.
Pair Corralation between Commerzbank and Delta Technologies
Assuming the 90 days trading horizon Commerzbank AG is expected to under-perform the Delta Technologies. In addition to that, Commerzbank is 1.8 times more volatile than Delta Technologies Nyrt. It trades about -0.47 of its total potential returns per unit of risk. Delta Technologies Nyrt is currently generating about -0.08 per unit of volatility. If you would invest 7,080 in Delta Technologies Nyrt on August 29, 2024 and sell it today you would lose (180.00) from holding Delta Technologies Nyrt or give up 2.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 40.91% |
| Values | Daily Returns |
Commerzbank AG vs. Delta Technologies Nyrt
Performance |
| Timeline |
| Commerzbank AG |
| Delta Technologies Nyrt |
Commerzbank and Delta Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerzbank and Delta Technologies
The main advantage of trading using opposite Commerzbank and Delta Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerzbank position performs unexpectedly, Delta Technologies 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 Technologies will offset losses from the drop in Delta Technologies' long position.| Commerzbank vs. NordTelekom Telecommunications Service | Commerzbank vs. Nutex Investments PLC | Commerzbank vs. Delta Technologies Nyrt |
| Delta Technologies vs. NordTelekom Telecommunications Service | Delta Technologies vs. CIG Pannonia Life | Delta Technologies vs. Infineon Technologies AG | Delta Technologies vs. Nutex Investments PLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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