Correlation Between Delta Electronics and Alfen NV
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and Alfen NV 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 Alfen NV 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 Alfen NV, you can compare the effects of market volatilities on Delta Electronics and Alfen NV 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 Alfen NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and Alfen NV.
Diversification Opportunities for Delta Electronics and Alfen NV
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Delta and Alfen is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics Public and Alfen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfen NV 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 Alfen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfen NV has no effect on the direction of Delta Electronics i.e., Delta Electronics and Alfen NV go up and down completely randomly.
Pair Corralation between Delta Electronics and Alfen NV
Assuming the 90 days trading horizon Delta Electronics Public is expected to generate 1.4 times more return on investment than Alfen NV. However, Delta Electronics is 1.4 times more volatile than Alfen NV. It trades about 0.07 of its potential returns per unit of risk. Alfen NV is currently generating about -0.03 per unit of risk. If you would invest 394.00 in Delta Electronics Public on September 24, 2024 and sell it today you would earn a total of 14.00 from holding Delta Electronics Public or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Electronics Public vs. Alfen NV
Performance |
| Timeline |
| Delta Electronics Public |
| Alfen NV |
Delta Electronics and Alfen NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and Alfen NV
The main advantage of trading using opposite Delta Electronics and Alfen NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, Alfen NV 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 Alfen NV will offset losses from the drop in Alfen NV's long position.| Delta Electronics vs. YASKAWA ELEC UNSP | Delta Electronics vs. Plug Power | Delta Electronics vs. VERTIV HOLCL A | Delta Electronics vs. OSRAM LICHT N |
| Alfen NV vs. Delta Electronics Public | Alfen NV vs. YASKAWA ELEC UNSP | Alfen NV vs. Plug Power | Alfen NV vs. VERTIV HOLCL A |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |