Correlation Between Light Science and Deltex Medical
Can any of the company-specific risk be diversified away by investing in both Light Science and Deltex Medical 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 Light Science and Deltex Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Light Science Technologies and Deltex Medical Group, you can compare the effects of market volatilities on Light Science and Deltex Medical 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 Light Science with a short position of Deltex Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Light Science and Deltex Medical.
Diversification Opportunities for Light Science and Deltex Medical
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Light and Deltex is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Light Science Technologies and Deltex Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deltex Medical Group and Light Science 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 Light Science Technologies are associated (or correlated) with Deltex Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deltex Medical Group has no effect on the direction of Light Science i.e., Light Science and Deltex Medical go up and down completely randomly.
Pair Corralation between Light Science and Deltex Medical
Assuming the 90 days trading horizon Light Science Technologies is expected to generate 0.23 times more return on investment than Deltex Medical. However, Light Science Technologies is 4.29 times less risky than Deltex Medical. It trades about -0.25 of its potential returns per unit of risk. Deltex Medical Group is currently generating about -0.16 per unit of risk. If you would invest 270.00 in Light Science Technologies on October 25, 2024 and sell it today you would lose (35.00) from holding Light Science Technologies or give up 12.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Light Science Technologies vs. Deltex Medical Group
Performance |
| Timeline |
| Light Science Techno |
| Deltex Medical Group |
Light Science and Deltex Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Light Science and Deltex Medical
The main advantage of trading using opposite Light Science and Deltex Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Light Science position performs unexpectedly, Deltex Medical 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 Deltex Medical will offset losses from the drop in Deltex Medical's long position.| Light Science vs. Global Net Lease | Light Science vs. Solstad Offshore ASA | Light Science vs. Host Hotels Resorts | Light Science vs. Ecofin Global Utilities |
| Deltex Medical vs. SupplyMe Capital PLC | Deltex Medical vs. SM Energy Co | Deltex Medical vs. FuelCell Energy | Deltex Medical vs. Grand Vision Media |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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