Correlation Between Deltex Medical and Light Science
Can any of the company-specific risk be diversified away by investing in both Deltex Medical and Light Science 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 Light Science 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 Light Science Technologies, you can compare the effects of market volatilities on Deltex Medical and Light Science 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 Light Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deltex Medical and Light Science.
Diversification Opportunities for Deltex Medical and Light Science
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Deltex and Light is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Deltex Medical Group and Light Science Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Science Techno 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 Light Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Science Techno has no effect on the direction of Deltex Medical i.e., Deltex Medical and Light Science go up and down completely randomly.
Pair Corralation between Deltex Medical and Light Science
Assuming the 90 days trading horizon Deltex Medical Group is expected to generate 0.79 times more return on investment than Light Science. However, Deltex Medical Group is 1.26 times less risky than Light Science. It trades about 0.01 of its potential returns per unit of risk. Light Science Technologies is currently generating about -0.23 per unit of risk. If you would invest 8.00 in Deltex Medical Group on October 13, 2024 and sell it today you would earn a total of 0.00 from holding Deltex Medical Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deltex Medical Group vs. Light Science Technologies
Performance |
| Timeline |
| Deltex Medical Group |
| Light Science Techno |
Deltex Medical and Light Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deltex Medical and Light Science
The main advantage of trading using opposite Deltex Medical and Light Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deltex Medical position performs unexpectedly, Light Science 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 Light Science will offset losses from the drop in Light Science's long position.| Deltex Medical vs. Berkshire Hathaway | Deltex Medical vs. Samsung Electronics Co | Deltex Medical vs. Samsung Electronics Co | Deltex Medical vs. Chocoladefabriken Lindt Spruengli |
| Light Science vs. Datalogic | Light Science vs. Deltex Medical Group | Light Science vs. Teradata Corp | Light Science vs. Baker Steel Resources |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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