Correlation Between Delta Electronics and Monument Mining
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and Monument Mining 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 Monument Mining 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 Monument Mining Limited, you can compare the effects of market volatilities on Delta Electronics and Monument Mining 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 Monument Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and Monument Mining.
Diversification Opportunities for Delta Electronics and Monument Mining
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Delta and Monument is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics Public and Monument Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monument Mining 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 Monument Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monument Mining has no effect on the direction of Delta Electronics i.e., Delta Electronics and Monument Mining go up and down completely randomly.
Pair Corralation between Delta Electronics and Monument Mining
Assuming the 90 days trading horizon Delta Electronics Public is expected to under-perform the Monument Mining. But the stock apears to be less risky and, when comparing its historical volatility, Delta Electronics Public is 1.85 times less risky than Monument Mining. The stock trades about -0.06 of its potential returns per unit of risk. The Monument Mining Limited is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Monument Mining Limited on November 1, 2024 and sell it today you would earn a total of 3.00 from holding Monument Mining Limited or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Electronics Public vs. Monument Mining Limited
Performance |
| Timeline |
| Delta Electronics Public |
| Monument Mining |
Delta Electronics and Monument Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and Monument Mining
The main advantage of trading using opposite Delta Electronics and Monument Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, Monument Mining 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 Monument Mining will offset losses from the drop in Monument Mining's long position.| Delta Electronics vs. Nippon Light Metal | Delta Electronics vs. ARDAGH METAL PACDL 0001 | Delta Electronics vs. GREENX METALS LTD | Delta Electronics vs. The Yokohama Rubber |
| Monument Mining vs. Siemens Healthineers AG | Monument Mining vs. SHIP HEALTHCARE HLDGINC | Monument Mining vs. USWE SPORTS AB | Monument Mining vs. MPH Health Care |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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