Correlation Between Delta Electronics and Food Moments
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and Food Moments 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 Food Moments 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 Food Moments PCL, you can compare the effects of market volatilities on Delta Electronics and Food Moments 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 Food Moments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and Food Moments.
Diversification Opportunities for Delta Electronics and Food Moments
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Delta and Food is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics Public and Food Moments PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Food Moments PCL 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 Food Moments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Food Moments PCL has no effect on the direction of Delta Electronics i.e., Delta Electronics and Food Moments go up and down completely randomly.
Pair Corralation between Delta Electronics and Food Moments
Assuming the 90 days trading horizon Delta Electronics Public is expected to generate 1.75 times more return on investment than Food Moments. However, Delta Electronics is 1.75 times more volatile than Food Moments PCL. It trades about 0.2 of its potential returns per unit of risk. Food Moments PCL is currently generating about -0.15 per unit of risk. If you would invest 10,500 in Delta Electronics Public on August 29, 2024 and sell it today you would earn a total of 4,650 from holding Delta Electronics Public or generate 44.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Electronics Public vs. Food Moments PCL
Performance |
| Timeline |
| Delta Electronics Public |
| Food Moments PCL |
Delta Electronics and Food Moments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and Food Moments
The main advantage of trading using opposite Delta Electronics and Food Moments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, Food Moments 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 Food Moments will offset losses from the drop in Food Moments' long position.| Delta Electronics vs. Airports of Thailand | Delta Electronics vs. Hana Microelectronics Public | Delta Electronics vs. Advanced Info Service | Delta Electronics vs. Kasikornbank Public |
| Food Moments vs. Delta Electronics Public | Food Moments vs. Delta Electronics Public | Food Moments vs. Airports of Thailand | Food Moments vs. Airports of Thailand |
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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