Correlation Between Delta Electronics and MFC Industrial
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and MFC Industrial 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 MFC Industrial 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 MFC Industrial Investment, you can compare the effects of market volatilities on Delta Electronics and MFC Industrial 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 MFC Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and MFC Industrial.
Diversification Opportunities for Delta Electronics and MFC Industrial
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Delta and MFC is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics Public and MFC Industrial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFC Industrial Investment 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 MFC Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFC Industrial Investment has no effect on the direction of Delta Electronics i.e., Delta Electronics and MFC Industrial go up and down completely randomly.
Pair Corralation between Delta Electronics and MFC Industrial
Assuming the 90 days trading horizon Delta Electronics Public is expected to generate 2.27 times more return on investment than MFC Industrial. However, Delta Electronics is 2.27 times more volatile than MFC Industrial Investment. It trades about 0.15 of its potential returns per unit of risk. MFC Industrial Investment is currently generating about 0.02 per unit of risk. If you would invest 7,327 in Delta Electronics Public on August 25, 2024 and sell it today you would earn a total of 7,273 from holding Delta Electronics Public or generate 99.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.45% |
| Values | Daily Returns |
Delta Electronics Public vs. MFC Industrial Investment
Performance |
| Timeline |
| Delta Electronics Public |
| MFC Industrial Investment |
Delta Electronics and MFC Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and MFC Industrial
The main advantage of trading using opposite Delta Electronics and MFC Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, MFC Industrial 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 MFC Industrial will offset losses from the drop in MFC Industrial's long position.| Delta Electronics vs. AP Public | Delta Electronics vs. Jasmine International Public | Delta Electronics vs. Asia Plus Group | Delta Electronics vs. Bangkok Aviation Fuel |
| MFC Industrial vs. Delta Electronics Public | MFC Industrial vs. Delta Electronics Public | MFC Industrial vs. Airports of Thailand | MFC Industrial 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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