Correlation Between Delta Electronics and Premier Technology
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and Premier Technology 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 Premier Technology 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 Premier Technology Public, you can compare the effects of market volatilities on Delta Electronics and Premier Technology 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 Premier Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and Premier Technology.
Diversification Opportunities for Delta Electronics and Premier Technology
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Delta and Premier is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics Public and Premier Technology Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Technology Public 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 Premier Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Technology Public has no effect on the direction of Delta Electronics i.e., Delta Electronics and Premier Technology go up and down completely randomly.
Pair Corralation between Delta Electronics and Premier Technology
Assuming the 90 days trading horizon Delta Electronics Public is expected to generate 4.99 times more return on investment than Premier Technology. However, Delta Electronics is 4.99 times more volatile than Premier Technology Public. It trades about 0.1 of its potential returns per unit of risk. Premier Technology Public is currently generating about -0.14 per unit of risk. If you would invest 13,950 in Delta Electronics Public on September 3, 2024 and sell it today you would earn a total of 1,100 from holding Delta Electronics Public or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Electronics Public vs. Premier Technology Public
Performance |
| Timeline |
| Delta Electronics Public |
| Premier Technology Public |
Delta Electronics and Premier Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and Premier Technology
The main advantage of trading using opposite Delta Electronics and Premier Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, Premier Technology 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 Premier Technology will offset losses from the drop in Premier Technology's 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 |
| Premier Technology vs. KCE Electronics Public | Premier Technology vs. Land and Houses | Premier Technology vs. Delta Electronics Public | Premier Technology vs. The Siam Cement |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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