Correlation Between Delta Galil and Terminal X

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

By analyzing existing cross correlation between Delta Galil Industries and Terminal X Online, you can compare the effects of market volatilities on Delta Galil and Terminal X 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 Galil with a short position of Terminal X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Galil and Terminal X.

Diversification Opportunities for Delta Galil and Terminal X

0.34

Correlation Coefficient

Delta Galil  Terminal X

Weak diversification

The 3 months correlation between Delta and Terminal is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Delta Galil Industries and Terminal X Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terminal X Online and Delta Galil 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 Galil Industries are associated (or correlated) with Terminal X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terminal X Online has no effect on the direction of Delta Galil i.e., Delta Galil and Terminal X go up and down completely randomly.

Pair Corralation between Delta Galil and Terminal X

Assuming the 90 days trading horizon Delta Galil Industries is expected to generate 0.91 times more return on investment than Terminal X. However, Delta Galil Industries is 1.1 times less risky than Terminal X. It trades about -0.09 of its potential returns per unit of risk. Terminal X Online is currently generating about -0.09 per unit of risk. If you would invest  1,977,000  in Delta Galil Industries on December 30, 2024 and sell it today you would lose (170,000) from holding Delta Galil Industries or give up 8.6% of portfolio value over 90 days.

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

Delta Galil Industries  vs.  Terminal X Online

Delta Galil Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Delta Galil Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Terminal X Online

Risk-Adjusted Performance

Very Weak

Over the last 90 days Terminal X Online has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Delta Galil and Terminal X

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

The idea behind Delta Galil Industries and Terminal X Online 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.