Correlation Between Delta CleanTech and Aduro Clean

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

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

Diversification Opportunities for Delta CleanTech and Aduro Clean

0.11

Correlation Coefficient

Delta CleanTech  Aduro Clean

Average diversification

The 3 months correlation between Delta and Aduro is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Delta CleanTech and Aduro Clean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aduro Clean Technologies and Delta CleanTech 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 Delta CleanTech are associated (or correlated) with Aduro Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aduro Clean Technologies has no effect on the direction of Delta CleanTech i.e., Delta CleanTech and Aduro Clean go up and down completely randomly.

Pair Corralation between Delta CleanTech and Aduro Clean

Assuming the 90 days horizon Delta CleanTech is expected to generate 11.16 times more return on investment than Aduro Clean. However, Delta CleanTech is 11.16 times more volatile than Aduro Clean Technologies. It trades about 0.15 of its potential returns per unit of risk. Aduro Clean Technologies is currently generating about 0.05 per unit of risk. If you would invest  1.60  in Delta CleanTech on December 19, 2024 and sell it today you would earn a total of  1.37  from holding Delta CleanTech or generate 85.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	40.98%
Values	Daily Returns

Delta CleanTech  vs.  Aduro Clean Technologies

Delta CleanTech

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delta CleanTech are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Delta CleanTech reported solid returns over the last few months and may actually be approaching a breakup point.

Aduro Clean Technologies

Risk-Adjusted Performance

Insignificant

Over the last 90 days Aduro Clean Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak technical indicators, Aduro Clean may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Delta CleanTech and Aduro Clean

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

The idea behind Delta CleanTech and Aduro Clean Technologies 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.