Correlation Between Delta CleanTech and 374Water Common

Can any of the company-specific risk be diversified away by investing in both Delta CleanTech and 374Water Common 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 374Water Common into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Delta CleanTech and 374Water Common Stock, you can compare the effects of market volatilities on Delta CleanTech and 374Water Common 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 374Water Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta CleanTech and 374Water Common.

Diversification Opportunities for Delta CleanTech and 374Water Common

-0.07

Correlation Coefficient

Delta CleanTech  374Water Common

Good diversification

The 3 months correlation between Delta and 374Water is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Delta CleanTech and 374Water Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 374Water Common Stock 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 374Water Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 374Water Common Stock has no effect on the direction of Delta CleanTech i.e., Delta CleanTech and 374Water Common go up and down completely randomly.

Pair Corralation between Delta CleanTech and 374Water Common

Assuming the 90 days horizon Delta CleanTech is expected to generate 7.87 times more return on investment than 374Water Common. However, Delta CleanTech is 7.87 times more volatile than 374Water Common Stock. It trades about 0.15 of its potential returns per unit of risk. 374Water Common Stock is currently generating about -0.18 per unit of risk. If you would invest  2.25  in Delta CleanTech on December 29, 2024 and sell it today you would earn a total of  1.11  from holding Delta CleanTech or generate 49.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Delta CleanTech  vs.  374Water Common Stock

Delta CleanTech

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delta CleanTech are ranked lower than 11 (%) 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.

374Water Common Stock

Risk-Adjusted Performance

Very Weak

Over the last 90 days 374Water Common Stock 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 very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Delta CleanTech and 374Water Common

The main advantage of trading using opposite Delta CleanTech and 374Water Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta CleanTech position performs unexpectedly, 374Water Common 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 374Water Common will offset losses from the drop in 374Water Common's long position.

The idea behind Delta CleanTech and 374Water Common Stock 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.

Check out your portfolio center.

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 Transaction History module to view history of all your transactions and understand their impact on performance.