Correlation Between Deltex Medical and Automatic Data
Can any of the company-specific risk be diversified away by investing in both Deltex Medical and Automatic Data 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 Deltex Medical and Automatic Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deltex Medical Group and Automatic Data Processing, you can compare the effects of market volatilities on Deltex Medical and Automatic Data 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 Deltex Medical with a short position of Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deltex Medical and Automatic Data.
Diversification Opportunities for Deltex Medical and Automatic Data
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deltex and Automatic is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Deltex Medical Group and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing and Deltex Medical 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 Deltex Medical Group are associated (or correlated) with Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of Deltex Medical i.e., Deltex Medical and Automatic Data go up and down completely randomly.
Pair Corralation between Deltex Medical and Automatic Data
Assuming the 90 days trading horizon Deltex Medical Group is expected to under-perform the Automatic Data. In addition to that, Deltex Medical is 10.1 times more volatile than Automatic Data Processing. It trades about -0.14 of its total potential returns per unit of risk. Automatic Data Processing is currently generating about -0.05 per unit of volatility. If you would invest 30,538 in Automatic Data Processing on October 30, 2024 and sell it today you would lose (546.00) from holding Automatic Data Processing or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Deltex Medical Group vs. Automatic Data Processing
Performance |
| Timeline |
| Deltex Medical Group |
| Automatic Data Processing |
Deltex Medical and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deltex Medical and Automatic Data
The main advantage of trading using opposite Deltex Medical and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deltex Medical position performs unexpectedly, Automatic Data 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 Automatic Data will offset losses from the drop in Automatic Data's long position.| Deltex Medical vs. Scandinavian Tobacco Group | Deltex Medical vs. Playtech Plc | Deltex Medical vs. Pressure Technologies Plc | Deltex Medical vs. Spotify Technology SA |
| Automatic Data vs. Adriatic Metals | Automatic Data vs. Atalaya Mining | Automatic Data vs. Dairy Farm International | Automatic Data vs. Tyson Foods Cl |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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