Correlation Between Delpha Construction and Far Eastern
Can any of the company-specific risk be diversified away by investing in both Delpha Construction and Far Eastern 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 Delpha Construction and Far Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delpha Construction Co and Far Eastern New, you can compare the effects of market volatilities on Delpha Construction and Far Eastern 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 Delpha Construction with a short position of Far Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delpha Construction and Far Eastern.
Diversification Opportunities for Delpha Construction and Far Eastern
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Delpha and Far is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Delpha Construction Co and Far Eastern New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far Eastern New and Delpha Construction 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 Delpha Construction Co are associated (or correlated) with Far Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far Eastern New has no effect on the direction of Delpha Construction i.e., Delpha Construction and Far Eastern go up and down completely randomly.
Pair Corralation between Delpha Construction and Far Eastern
Assuming the 90 days trading horizon Delpha Construction Co is expected to generate 1.51 times more return on investment than Far Eastern. However, Delpha Construction is 1.51 times more volatile than Far Eastern New. It trades about 0.1 of its potential returns per unit of risk. Far Eastern New is currently generating about 0.0 per unit of risk. If you would invest 1,720 in Delpha Construction Co on October 5, 2024 and sell it today you would earn a total of 2,180 from holding Delpha Construction Co or generate 126.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Delpha Construction Co vs. Far Eastern New
Performance |
Timeline |
Delpha Construction |
Far Eastern New |
Delpha Construction and Far Eastern Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Delpha Construction and Far Eastern
The main advantage of trading using opposite Delpha Construction and Far Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delpha Construction position performs unexpectedly, Far Eastern 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 Far Eastern will offset losses from the drop in Far Eastern's long position.Delpha Construction vs. BES Engineering Co | Delpha Construction vs. Kindom Construction Corp | Delpha Construction vs. Hung Sheng Construction | Delpha Construction vs. Cathay Real Estate |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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