Correlation Between Delta Electronics and Sung Gang

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

By analyzing existing cross correlation between Delta Electronics and Sung Gang Asset, you can compare the effects of market volatilities on Delta Electronics and Sung Gang 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 Sung Gang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and Sung Gang.

Diversification Opportunities for Delta Electronics and Sung Gang

-0.35

Correlation Coefficient

Delta Electronics  Sung Gang

Very good diversification

The 3 months correlation between Delta and Sung is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics and Sung Gang Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sung Gang Asset 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 Sung Gang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sung Gang Asset has no effect on the direction of Delta Electronics i.e., Delta Electronics and Sung Gang go up and down completely randomly.

Pair Corralation between Delta Electronics and Sung Gang

Assuming the 90 days trading horizon Delta Electronics is expected to under-perform the Sung Gang. In addition to that, Delta Electronics is 1.67 times more volatile than Sung Gang Asset. It trades about -0.03 of its total potential returns per unit of risk. Sung Gang Asset is currently generating about 0.12 per unit of volatility. If you would invest  2,035  in Sung Gang Asset on December 21, 2024 and sell it today you would earn a total of  195.00  from holding Sung Gang Asset or generate 9.58% 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.  Sung Gang Asset

Delta Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Delta Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Delta Electronics is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Sung Gang Asset

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sung Gang Asset are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sung Gang may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Delta Electronics and Sung Gang

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

The idea behind Delta Electronics and Sung Gang Asset 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.