Correlation Between Deltex Medical and United Utilities
Can any of the company-specific risk be diversified away by investing in both Deltex Medical and United Utilities 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 United Utilities 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 United Utilities Group, you can compare the effects of market volatilities on Deltex Medical and United Utilities 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 United Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deltex Medical and United Utilities.
Diversification Opportunities for Deltex Medical and United Utilities
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deltex and United is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Deltex Medical Group and United Utilities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Utilities 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 United Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Utilities has no effect on the direction of Deltex Medical i.e., Deltex Medical and United Utilities go up and down completely randomly.
Pair Corralation between Deltex Medical and United Utilities
Assuming the 90 days trading horizon Deltex Medical Group is expected to generate 1.58 times more return on investment than United Utilities. However, Deltex Medical is 1.58 times more volatile than United Utilities Group. It trades about 0.01 of its potential returns per unit of risk. United Utilities Group is currently generating about -0.32 per unit of risk. If you would invest 8.00 in Deltex Medical Group on October 11, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deltex Medical Group vs. United Utilities Group
Performance |
| Timeline |
| Deltex Medical Group |
| United Utilities |
Deltex Medical and United Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deltex Medical and United Utilities
The main advantage of trading using opposite Deltex Medical and United Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deltex Medical position performs unexpectedly, United Utilities 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 United Utilities will offset losses from the drop in United Utilities' long position.| Deltex Medical vs. CVS Health Corp | Deltex Medical vs. Worldwide Healthcare Trust | Deltex Medical vs. MyHealthChecked Plc | Deltex Medical vs. PureTech Health plc |
| United Utilities vs. Deltex Medical Group | United Utilities vs. Teradata Corp | United Utilities vs. Sunny Optical Technology | United Utilities vs. Allianz Technology Trust |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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