Correlation Between Delta Electronics and Kering SA
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and Kering SA 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 Kering SA 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 Kering SA, you can compare the effects of market volatilities on Delta Electronics and Kering SA 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 Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and Kering SA.
Diversification Opportunities for Delta Electronics and Kering SA
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Delta and Kering is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics Public and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA 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 Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of Delta Electronics i.e., Delta Electronics and Kering SA go up and down completely randomly.
Pair Corralation between Delta Electronics and Kering SA
Assuming the 90 days trading horizon Delta Electronics Public is expected to under-perform the Kering SA. In addition to that, Delta Electronics is 1.52 times more volatile than Kering SA. It trades about -0.09 of its total potential returns per unit of risk. Kering SA is currently generating about 0.2 per unit of volatility. If you would invest 23,164 in Kering SA on October 25, 2024 and sell it today you would earn a total of 1,741 from holding Kering SA or generate 7.52% 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. Kering SA
Performance |
| Timeline |
| Delta Electronics Public |
| Kering SA |
Delta Electronics and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and Kering SA
The main advantage of trading using opposite Delta Electronics and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA's long position.The idea behind Delta Electronics Public and Kering SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kering SA vs. Host Hotels Resorts | Kering SA vs. Wyndham Hotels Resorts | Kering SA vs. INTERCONT HOTELS | Kering SA 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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