Correlation Between Delta Electronics and SCB X
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and SCB X 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 SCB X 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 SCB X Public, you can compare the effects of market volatilities on Delta Electronics and SCB X 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 SCB X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and SCB X.
Diversification Opportunities for Delta Electronics and SCB X
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Delta and SCB is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics Public and SCB X Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCB X 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 SCB X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCB X Public has no effect on the direction of Delta Electronics i.e., Delta Electronics and SCB X go up and down completely randomly.
Pair Corralation between Delta Electronics and SCB X
Assuming the 90 days trading horizon Delta Electronics Public is expected to generate 3.09 times more return on investment than SCB X. However, Delta Electronics is 3.09 times more volatile than SCB X Public. It trades about 0.06 of its potential returns per unit of risk. SCB X Public is currently generating about 0.06 per unit of risk. If you would invest 6,924 in Delta Electronics Public on September 3, 2024 and sell it today you would earn a total of 8,126 from holding Delta Electronics Public or generate 117.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Delta Electronics Public vs. SCB X Public
Performance |
| Timeline |
| Delta Electronics Public |
| SCB X Public |
Delta Electronics and SCB X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and SCB X
The main advantage of trading using opposite Delta Electronics and SCB X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, SCB X 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 SCB X will offset losses from the drop in SCB X'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 |
| SCB X vs. WHA Industrial Leasehold | SCB X vs. Charoen Pokphand Foods | SCB X vs. CENTRAL RETAIL P | SCB X vs. Lohakit Metal Public |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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