Correlation Between Delta Electronics and Northland Power
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and Northland Power 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 Delta Electronics and Northland Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Electronics Public and Northland Power, you can compare the effects of market volatilities on Delta Electronics and Northland Power 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 Delta Electronics with a short position of Northland Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and Northland Power.
Diversification Opportunities for Delta Electronics and Northland Power
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Delta and Northland is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics Public and Northland Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northland Power and Delta Electronics 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 Delta Electronics Public are associated (or correlated) with Northland Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northland Power has no effect on the direction of Delta Electronics i.e., Delta Electronics and Northland Power go up and down completely randomly.
Pair Corralation between Delta Electronics and Northland Power
Assuming the 90 days trading horizon Delta Electronics Public is expected to under-perform the Northland Power. In addition to that, Delta Electronics is 1.01 times more volatile than Northland Power. It trades about -0.04 of its total potential returns per unit of risk. Northland Power is currently generating about -0.02 per unit of volatility. If you would invest 1,193 in Northland Power on October 28, 2024 and sell it today you would lose (25.00) from holding Northland Power or give up 2.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Electronics Public vs. Northland Power
Performance |
| Timeline |
| Delta Electronics Public |
| Northland Power |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Delta Electronics and Northland Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and Northland Power
The main advantage of trading using opposite Delta Electronics and Northland Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, Northland Power 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 Northland Power will offset losses from the drop in Northland Power's long position.| Delta Electronics vs. PKSHA TECHNOLOGY INC | Delta Electronics vs. Kingdee International Software | Delta Electronics vs. Vishay Intertechnology | Delta Electronics vs. Hyatt Hotels |
| Northland Power vs. Meli Hotels International | Northland Power vs. QBE Insurance Group | Northland Power vs. MELIA HOTELS | Northland Power vs. Mitsui Chemicals |
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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