Correlation Between Delta Electronics and SWISS WATER
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and SWISS WATER 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 SWISS WATER 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 SWISS WATER DECAFFCOFFEE, you can compare the effects of market volatilities on Delta Electronics and SWISS WATER 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 SWISS WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and SWISS WATER.
Diversification Opportunities for Delta Electronics and SWISS WATER
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Delta and SWISS is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics Public and SWISS WATER DECAFFCOFFEE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWISS WATER DECAFFCOFFEE 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 SWISS WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWISS WATER DECAFFCOFFEE has no effect on the direction of Delta Electronics i.e., Delta Electronics and SWISS WATER go up and down completely randomly.
Pair Corralation between Delta Electronics and SWISS WATER
Assuming the 90 days trading horizon Delta Electronics Public is expected to generate 0.87 times more return on investment than SWISS WATER. However, Delta Electronics Public is 1.15 times less risky than SWISS WATER. It trades about -0.1 of its potential returns per unit of risk. SWISS WATER DECAFFCOFFEE is currently generating about -0.14 per unit of risk. If you would invest 384.00 in Delta Electronics Public on November 3, 2024 and sell it today you would lose (26.00) from holding Delta Electronics Public or give up 6.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Electronics Public vs. SWISS WATER DECAFFCOFFEE
Performance |
| Timeline |
| Delta Electronics Public |
| SWISS WATER DECAFFCOFFEE |
Delta Electronics and SWISS WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and SWISS WATER
The main advantage of trading using opposite Delta Electronics and SWISS WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, SWISS WATER 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 SWISS WATER will offset losses from the drop in SWISS WATER's long position.| Delta Electronics vs. ACCSYS TECHPLC EO | Delta Electronics vs. Planet Fitness | Delta Electronics vs. VELA TECHNOLPLC LS 0001 | Delta Electronics vs. GLG LIFE TECH |
| SWISS WATER vs. PATTIES FOODS | SWISS WATER vs. TYSON FOODS A | SWISS WATER vs. OFFICE DEPOT | SWISS WATER vs. Cal Maine Foods |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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