Correlation Between Varta AG and Delta Electronics
Can any of the company-specific risk be diversified away by investing in both Varta AG and Delta Electronics 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 Varta AG and Delta Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Varta AG and Delta Electronics Public, you can compare the effects of market volatilities on Varta AG and Delta Electronics 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 Varta AG with a short position of Delta Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Varta AG and Delta Electronics.
Diversification Opportunities for Varta AG and Delta Electronics
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Varta and Delta is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Varta AG and Delta Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Electronics Public and Varta AG 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 Varta AG are associated (or correlated) with Delta Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Electronics Public has no effect on the direction of Varta AG i.e., Varta AG and Delta Electronics go up and down completely randomly.
Pair Corralation between Varta AG and Delta Electronics
Assuming the 90 days trading horizon Varta AG is expected to under-perform the Delta Electronics. In addition to that, Varta AG is 1.62 times more volatile than Delta Electronics Public. It trades about -0.27 of its total potential returns per unit of risk. Delta Electronics Public is currently generating about 0.01 per unit of volatility. If you would invest 420.00 in Delta Electronics Public on September 12, 2024 and sell it today you would lose (2.00) from holding Delta Electronics Public or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Varta AG vs. Delta Electronics Public
Performance |
| Timeline |
| Varta AG |
| Delta Electronics Public |
Varta AG and Delta Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Varta AG and Delta Electronics
The main advantage of trading using opposite Varta AG and Delta Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Varta AG position performs unexpectedly, Delta Electronics 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 Delta Electronics will offset losses from the drop in Delta Electronics' long position.| Varta AG vs. Superior Plus Corp | Varta AG vs. SIVERS SEMICONDUCTORS AB | Varta AG vs. Norsk Hydro ASA | Varta AG vs. Reliance Steel Aluminum |
| Delta Electronics vs. Columbia Sportswear | Delta Electronics vs. Japan Asia Investment | Delta Electronics vs. Transport International Holdings | Delta Electronics vs. Postal Savings Bank |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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