Correlation Between Delfingen and Akwel SA

Can any of the company-specific risk be diversified away by investing in both Delfingen and Akwel 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 Delfingen and Akwel SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Delfingen and Akwel SA, you can compare the effects of market volatilities on Delfingen and Akwel 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 Delfingen with a short position of Akwel SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delfingen and Akwel SA.

Diversification Opportunities for Delfingen and Akwel SA

0.8

Correlation Coefficient

Delfingen  Akwel SA

Very poor diversification

The 3 months correlation between Delfingen and Akwel is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Delfingen and Akwel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akwel SA and Delfingen 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 Delfingen are associated (or correlated) with Akwel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akwel SA has no effect on the direction of Delfingen i.e., Delfingen and Akwel SA go up and down completely randomly.

Pair Corralation between Delfingen and Akwel SA

Assuming the 90 days trading horizon Delfingen is expected to under-perform the Akwel SA. In addition to that, Delfingen is 1.3 times more volatile than Akwel SA. It trades about -0.52 of its total potential returns per unit of risk. Akwel SA is currently generating about -0.17 per unit of volatility. If you would invest  1,016  in Akwel SA on September 3, 2024 and sell it today you would lose (216.00) from holding Akwel SA or give up 21.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Delfingen  vs.  Akwel SA

Delfingen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delfingen has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Akwel SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akwel SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Delfingen and Akwel SA

The main advantage of trading using opposite Delfingen and Akwel SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delfingen position performs unexpectedly, Akwel 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 Akwel SA will offset losses from the drop in Akwel SA's long position.

The idea behind Delfingen and Akwel 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.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.