Correlation Between CIG Pannonia and Delta Technologies

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

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

Diversification Opportunities for CIG Pannonia and Delta Technologies

0.75

Correlation Coefficient

CIG Pannonia  Delta Technologies

Poor diversification

The 3 months correlation between CIG and Delta is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding CIG Pannonia Life 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 CIG Pannonia 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 CIG Pannonia Life 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 CIG Pannonia i.e., CIG Pannonia and Delta Technologies go up and down completely randomly.

Pair Corralation between CIG Pannonia and Delta Technologies

Assuming the 90 days trading horizon CIG Pannonia Life is expected to generate 0.7 times more return on investment than Delta Technologies. However, CIG Pannonia Life is 1.43 times less risky than Delta Technologies. It trades about 0.0 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  37,100  in CIG Pannonia Life on December 30, 2024 and sell it today you would lose (500.00) from holding CIG Pannonia Life or give up 1.35% of portfolio value over 90 days.

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

CIG Pannonia Life  vs.  Delta Technologies Nyrt

CIG Pannonia Life

Risk-Adjusted Performance

Very Weak

Over the last 90 days CIG Pannonia Life has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, CIG Pannonia is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 CIG Pannonia and Delta Technologies

The main advantage of trading using opposite CIG Pannonia and Delta Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIG Pannonia 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 CIG Pannonia Life 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.