Correlation Between APEX International and Deltamac Taiwan

Can any of the company-specific risk be diversified away by investing in both APEX International and Deltamac Taiwan 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 APEX International and Deltamac Taiwan into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for APEX International and Deltamac Taiwan

0.72

Correlation Coefficient

APEX International  Deltamac Taiwan

Poor diversification

The 3 months correlation between APEX and Deltamac is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding APEX International Financial and Deltamac Taiwan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deltamac Taiwan and APEX International 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 APEX International Financial are associated (or correlated) with Deltamac Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deltamac Taiwan has no effect on the direction of APEX International i.e., APEX International and Deltamac Taiwan go up and down completely randomly.

Pair Corralation between APEX International and Deltamac Taiwan

Assuming the 90 days trading horizon APEX International Financial is expected to under-perform the Deltamac Taiwan. But the stock apears to be less risky and, when comparing its historical volatility, APEX International Financial is 2.32 times less risky than Deltamac Taiwan. The stock trades about -0.03 of its potential returns per unit of risk. The Deltamac Taiwan Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3,095  in Deltamac Taiwan Co on December 4, 2024 and sell it today you would earn a total of  150.00  from holding Deltamac Taiwan Co or generate 4.85% return on investment over 90 days.

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

APEX International Financial  vs.  Deltamac Taiwan Co

APEX International

Risk-Adjusted Performance

Very Weak

Over the last 90 days APEX International Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Deltamac Taiwan

Risk-Adjusted Performance

Very Weak

Over the last 90 days Deltamac Taiwan Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with APEX International and Deltamac Taiwan

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

The idea behind APEX International Financial and Deltamac Taiwan Co 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.