Correlation Between Delta Electronics and GlobalWafers
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and GlobalWafers 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 GlobalWafers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Electronics and GlobalWafers Co, you can compare the effects of market volatilities on Delta Electronics and GlobalWafers 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 GlobalWafers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and GlobalWafers.
Diversification Opportunities for Delta Electronics and GlobalWafers
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Delta and GlobalWafers is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics and GlobalWafers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalWafers 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 are associated (or correlated) with GlobalWafers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalWafers has no effect on the direction of Delta Electronics i.e., Delta Electronics and GlobalWafers go up and down completely randomly.
Pair Corralation between Delta Electronics and GlobalWafers
Assuming the 90 days trading horizon Delta Electronics is expected to generate 9.78 times less return on investment than GlobalWafers. But when comparing it to its historical volatility, Delta Electronics is 1.83 times less risky than GlobalWafers. It trades about 0.01 of its potential returns per unit of risk. GlobalWafers Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 42,000 in GlobalWafers Co on September 5, 2024 and sell it today you would earn a total of 400.00 from holding GlobalWafers Co or generate 0.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Delta Electronics vs. GlobalWafers Co
Performance |
Timeline |
Delta Electronics |
GlobalWafers |
Delta Electronics and GlobalWafers Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Delta Electronics and GlobalWafers
The main advantage of trading using opposite Delta Electronics and GlobalWafers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, GlobalWafers 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 GlobalWafers will offset losses from the drop in GlobalWafers' long position.Delta Electronics vs. Taiwan Semiconductor Manufacturing | Delta Electronics vs. Yang Ming Marine | Delta Electronics vs. AU Optronics | Delta Electronics vs. Nan Ya Plastics |
GlobalWafers vs. Taiwan Semiconductor Manufacturing | GlobalWafers vs. Yang Ming Marine | GlobalWafers vs. AU Optronics | GlobalWafers vs. Nan Ya Plastics |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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