Correlation Between Delpha Construction and Yuanta Financial

Can any of the company-specific risk be diversified away by investing in both Delpha Construction and Yuanta Financial 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 Yuanta Financial 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 Yuanta Financial Holdings, you can compare the effects of market volatilities on Delpha Construction and Yuanta Financial 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 Yuanta Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delpha Construction and Yuanta Financial.

Diversification Opportunities for Delpha Construction and Yuanta Financial

0.63

Correlation Coefficient

Delpha Construction  Yuanta Financial

Poor diversification

The 3 months correlation between Delpha and Yuanta is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Delpha Construction Co and Yuanta Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Financial Holdings 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 Yuanta Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Financial Holdings has no effect on the direction of Delpha Construction i.e., Delpha Construction and Yuanta Financial go up and down completely randomly.

Pair Corralation between Delpha Construction and Yuanta Financial

Assuming the 90 days trading horizon Delpha Construction Co is expected to generate 1.32 times more return on investment than Yuanta Financial. However, Delpha Construction is 1.32 times more volatile than Yuanta Financial Holdings. It trades about 0.02 of its potential returns per unit of risk. Yuanta Financial Holdings is currently generating about 0.01 per unit of risk. If you would invest  3,985  in Delpha Construction Co on December 30, 2024 and sell it today you would earn a total of  45.00  from holding Delpha Construction Co or generate 1.13% return on investment over 90 days.

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

Delpha Construction Co  vs.  Yuanta Financial Holdings

Delpha Construction

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Delpha Construction Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Delpha Construction is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Yuanta Financial Holdings

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Delpha Construction and Yuanta Financial

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

The idea behind Delpha Construction Co and Yuanta Financial Holdings 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.