Correlation Between ALTEO Energiaszolgalta and Delta Technologies

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

By analyzing existing cross correlation between ALTEO Energiaszolgaltato Nyrt and Delta Technologies Nyrt, you can compare the effects of market volatilities on ALTEO Energiaszolgalta and Delta Technologies 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 ALTEO Energiaszolgalta with a short position of Delta Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALTEO Energiaszolgalta and Delta Technologies.

Diversification Opportunities for ALTEO Energiaszolgalta and Delta Technologies

0.02

Correlation Coefficient

ALTEO Energiaszolgalta  Delta Technologies

Significant diversification

The 3 months correlation between ALTEO and Delta is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding ALTEO Energiaszolgaltato Nyrt and Delta Technologies Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Technologies Nyrt and ALTEO Energiaszolgalta 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 ALTEO Energiaszolgaltato Nyrt are associated (or correlated) with Delta Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Technologies Nyrt has no effect on the direction of ALTEO Energiaszolgalta i.e., ALTEO Energiaszolgalta and Delta Technologies go up and down completely randomly.

Pair Corralation between ALTEO Energiaszolgalta and Delta Technologies

Assuming the 90 days trading horizon ALTEO Energiaszolgaltato Nyrt is expected to generate 0.74 times more return on investment than Delta Technologies. However, ALTEO Energiaszolgaltato Nyrt is 1.34 times less risky than Delta Technologies. It trades about 0.42 of its potential returns per unit of risk. Delta Technologies Nyrt is currently generating about -0.01 per unit of risk. If you would invest  405,000  in ALTEO Energiaszolgaltato Nyrt on December 30, 2024 and sell it today you would earn a total of  257,000  from holding ALTEO Energiaszolgaltato Nyrt or generate 63.46% return on investment over 90 days.

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

ALTEO Energiaszolgaltato Nyrt  vs.  Delta Technologies Nyrt

ALTEO Energiaszolgalta

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in ALTEO Energiaszolgaltato Nyrt are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ALTEO Energiaszolgalta sustained solid returns over the last few months and may actually be approaching a breakup point.

Delta Technologies Nyrt

Risk-Adjusted Performance

Very Weak

Over the last 90 days Delta Technologies Nyrt has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Delta Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ALTEO Energiaszolgalta and Delta Technologies

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

The idea behind ALTEO Energiaszolgaltato Nyrt and Delta Technologies Nyrt 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.