Correlation Between Mondelez International and Delfi

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

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

Diversification Opportunities for Mondelez International and Delfi

-0.15

Correlation Coefficient

Mondelez International  Delfi

Good diversification

The 3 months correlation between Mondelez and Delfi is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Mondelez International and Delfi Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delfi Limited and Mondelez International 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 Mondelez International are associated (or correlated) with Delfi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delfi Limited has no effect on the direction of Mondelez International i.e., Mondelez International and Delfi go up and down completely randomly.

Pair Corralation between Mondelez International and Delfi

Given the investment horizon of 90 days Mondelez International is expected to under-perform the Delfi. But the stock apears to be less risky and, when comparing its historical volatility, Mondelez International is 1.32 times less risky than Delfi. The stock trades about -0.24 of its potential returns per unit of risk. The Delfi Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  63.00  in Delfi Limited on September 5, 2024 and sell it today you would earn a total of  1.00  from holding Delfi Limited or generate 1.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Mondelez International  vs.  Delfi Limited

Mondelez International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mondelez International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's essential indicators remain fairly 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.

Delfi Limited

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Delfi Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Delfi is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Mondelez International and Delfi

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

The idea behind Mondelez International and Delfi Limited 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.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.