Correlation Between Delta Electronics and SG Capital
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and SG Capital 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 SG Capital 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 SG Capital PCL, you can compare the effects of market volatilities on Delta Electronics and SG Capital 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 SG Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and SG Capital.
Diversification Opportunities for Delta Electronics and SG Capital
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Delta and SGC is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics Public and SG Capital PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SG Capital 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 SG Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SG Capital PCL has no effect on the direction of Delta Electronics i.e., Delta Electronics and SG Capital go up and down completely randomly.
Pair Corralation between Delta Electronics and SG Capital
Assuming the 90 days trading horizon Delta Electronics Public is expected to generate 0.58 times more return on investment than SG Capital. However, Delta Electronics Public is 1.72 times less risky than SG Capital. It trades about 0.2 of its potential returns per unit of risk. SG Capital PCL is currently generating about 0.02 per unit of risk. If you would invest 7,300 in Delta Electronics Public on September 3, 2024 and sell it today you would earn a total of 7,750 from holding Delta Electronics Public or generate 106.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Electronics Public vs. SG Capital PCL
Performance |
| Timeline |
| Delta Electronics Public |
| SG Capital PCL |
Delta Electronics and SG Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and SG Capital
The main advantage of trading using opposite Delta Electronics and SG Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, SG Capital 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 SG Capital will offset losses from the drop in SG Capital'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 |
| SG Capital vs. Delta Electronics Public | SG Capital vs. Delta Electronics Public | SG Capital vs. Airports of Thailand | SG Capital 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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