Correlation Between Schroders Investment and Deltex Medical

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

By analyzing existing cross correlation between Schroders Investment Trusts and Deltex Medical Group, you can compare the effects of market volatilities on Schroders Investment and Deltex Medical 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 Schroders Investment with a short position of Deltex Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schroders Investment and Deltex Medical.

Diversification Opportunities for Schroders Investment and Deltex Medical

-0.63

Correlation Coefficient

Schroders Investment  Deltex Medical

Excellent diversification

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

Pair Corralation between Schroders Investment and Deltex Medical

Assuming the 90 days trading horizon Schroders Investment Trusts is expected to generate 0.26 times more return on investment than Deltex Medical. However, Schroders Investment Trusts is 3.8 times less risky than Deltex Medical. It trades about 0.15 of its potential returns per unit of risk. Deltex Medical Group is currently generating about -0.25 per unit of risk. If you would invest  44,900  in Schroders Investment Trusts on September 5, 2024 and sell it today you would earn a total of  3,400  from holding Schroders Investment Trusts or generate 7.57% return on investment over 90 days.

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

Schroders Investment Trusts  vs.  Deltex Medical Group

Schroders Investment

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Schroders Investment Trusts are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Schroders Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Deltex Medical Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deltex Medical Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Schroders Investment and Deltex Medical

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

The idea behind Schroders Investment Trusts and Deltex Medical Group 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.