Correlation Between Delpha Construction and Intai Technology

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

Diversification Opportunities for Delpha Construction and Intai Technology

0.58

Correlation Coefficient

Delpha Construction  Intai Technology

Very weak diversification

The 3 months correlation between Delpha and Intai is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Delpha Construction Co and Intai Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intai Technology 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 Intai Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intai Technology has no effect on the direction of Delpha Construction i.e., Delpha Construction and Intai Technology go up and down completely randomly.

Pair Corralation between Delpha Construction and Intai Technology

Assuming the 90 days trading horizon Delpha Construction Co is expected to generate 2.36 times more return on investment than Intai Technology. However, Delpha Construction is 2.36 times more volatile than Intai Technology. It trades about 0.07 of its potential returns per unit of risk. Intai Technology is currently generating about 0.01 per unit of risk. If you would invest  2,730  in Delpha Construction Co on September 17, 2024 and sell it today you would earn a total of  1,215  from holding Delpha Construction Co or generate 44.51% return on investment over 90 days.

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

Delpha Construction Co  vs.  Intai Technology

Delpha Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delpha Construction Co has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Intai Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intai Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Intai Technology 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 Intai Technology

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

The idea behind Delpha Construction Co and Intai Technology 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.