Correlation Between Delta Electronics and Centara Hotels
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and Centara Hotels 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 Delta Electronics and Centara Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Electronics Public and Centara Hotels Resorts, you can compare the effects of market volatilities on Delta Electronics and Centara Hotels 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 Delta Electronics with a short position of Centara Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and Centara Hotels.
Diversification Opportunities for Delta Electronics and Centara Hotels
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Delta and Centara is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics Public and Centara Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centara Hotels Resorts and Delta Electronics 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 Delta Electronics Public are associated (or correlated) with Centara Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centara Hotels Resorts has no effect on the direction of Delta Electronics i.e., Delta Electronics and Centara Hotels go up and down completely randomly.
Pair Corralation between Delta Electronics and Centara Hotels
Assuming the 90 days trading horizon Delta Electronics is expected to generate 87.93 times less return on investment than Centara Hotels. But when comparing it to its historical volatility, Delta Electronics Public is 62.39 times less risky than Centara Hotels. It trades about 0.11 of its potential returns per unit of risk. Centara Hotels Resorts is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 436.00 in Centara Hotels Resorts on September 3, 2024 and sell it today you would earn a total of 22.00 from holding Centara Hotels Resorts or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Electronics Public vs. Centara Hotels Resorts
Performance |
| Timeline |
| Delta Electronics Public |
| Centara Hotels Resorts |
Delta Electronics and Centara Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and Centara Hotels
The main advantage of trading using opposite Delta Electronics and Centara Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, Centara Hotels 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 Centara Hotels will offset losses from the drop in Centara Hotels' long position.| Delta Electronics vs. KCE Electronics Public | Delta Electronics vs. Land and Houses | Delta Electronics vs. The Siam Cement | Delta Electronics vs. Bangkok Bank Public |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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