Correlation Between Deltex Medical and Whitbread PLC
Can any of the company-specific risk be diversified away by investing in both Deltex Medical and Whitbread PLC 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 Whitbread PLC 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 Whitbread PLC, you can compare the effects of market volatilities on Deltex Medical and Whitbread PLC 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 Whitbread PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deltex Medical and Whitbread PLC.
Diversification Opportunities for Deltex Medical and Whitbread PLC
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Deltex and Whitbread is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Deltex Medical Group and Whitbread PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitbread PLC 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 Whitbread PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitbread PLC has no effect on the direction of Deltex Medical i.e., Deltex Medical and Whitbread PLC go up and down completely randomly.
Pair Corralation between Deltex Medical and Whitbread PLC
Assuming the 90 days trading horizon Deltex Medical Group is expected to under-perform the Whitbread PLC. In addition to that, Deltex Medical is 2.56 times more volatile than Whitbread PLC. It trades about -0.06 of its total potential returns per unit of risk. Whitbread PLC is currently generating about -0.02 per unit of volatility. If you would invest 325,741 in Whitbread PLC on September 12, 2024 and sell it today you would lose (33,041) from holding Whitbread PLC or give up 10.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deltex Medical Group vs. Whitbread PLC
Performance |
| Timeline |
| Deltex Medical Group |
| Whitbread PLC |
Deltex Medical and Whitbread PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deltex Medical and Whitbread PLC
The main advantage of trading using opposite Deltex Medical and Whitbread PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deltex Medical position performs unexpectedly, Whitbread PLC 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 Whitbread PLC will offset losses from the drop in Whitbread PLC's long position.| Deltex Medical vs. Mulberry Group PLC | Deltex Medical vs. Ikigai Ventures | Deltex Medical vs. Neometals | Deltex Medical vs. Coor Service Management |
| Whitbread PLC vs. Deltex Medical Group | Whitbread PLC vs. Sabre Insurance Group | Whitbread PLC vs. bet at home AG | Whitbread PLC vs. Vienna Insurance Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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