Correlation Between Excelsior Medical and Delta Asia

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

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

Diversification Opportunities for Excelsior Medical and Delta Asia

0.47

Correlation Coefficient

Excelsior Medical  Delta Asia

Very weak diversification

The 3 months correlation between Excelsior and Delta is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Excelsior Medical Co and Delta Asia International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Asia International and Excelsior Medical 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 Excelsior Medical Co are associated (or correlated) with Delta Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Asia International has no effect on the direction of Excelsior Medical i.e., Excelsior Medical and Delta Asia go up and down completely randomly.

Pair Corralation between Excelsior Medical and Delta Asia

Assuming the 90 days trading horizon Excelsior Medical Co is expected to generate 0.8 times more return on investment than Delta Asia. However, Excelsior Medical Co is 1.25 times less risky than Delta Asia. It trades about 0.31 of its potential returns per unit of risk. Delta Asia International is currently generating about 0.1 per unit of risk. If you would invest  8,550  in Excelsior Medical Co on December 4, 2024 and sell it today you would earn a total of  230.00  from holding Excelsior Medical Co or generate 2.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Excelsior Medical Co  vs.  Delta Asia International

Excelsior Medical

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Excelsior Medical Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Excelsior Medical is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Delta Asia International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Asia International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Delta Asia 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 Excelsior Medical and Delta Asia

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

The idea behind Excelsior Medical Co and Delta Asia International 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.