Correlation Between Delta Technologies and 4iG Nyrt

Can any of the company-specific risk be diversified away by investing in both Delta Technologies and 4iG Nyrt 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 Technologies and 4iG Nyrt into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Delta Technologies Nyrt and 4iG Nyrt, you can compare the effects of market volatilities on Delta Technologies and 4iG Nyrt 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 Technologies with a short position of 4iG Nyrt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Technologies and 4iG Nyrt.

Diversification Opportunities for Delta Technologies and 4iG Nyrt

0.08

Correlation Coefficient

Delta Technologies  4iG Nyrt

Significant diversification

The 3 months correlation between Delta and 4iG is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Delta Technologies Nyrt and 4iG Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4iG Nyrt and Delta Technologies 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 Technologies Nyrt are associated (or correlated) with 4iG Nyrt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4iG Nyrt has no effect on the direction of Delta Technologies i.e., Delta Technologies and 4iG Nyrt go up and down completely randomly.

Pair Corralation between Delta Technologies and 4iG Nyrt

Assuming the 90 days trading horizon Delta Technologies Nyrt is expected to under-perform the 4iG Nyrt. But the stock apears to be less risky and, when comparing its historical volatility, Delta Technologies Nyrt is 1.55 times less risky than 4iG Nyrt. The stock trades about -0.01 of its potential returns per unit of risk. The 4iG Nyrt is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  92,400  in 4iG Nyrt on December 30, 2024 and sell it today you would earn a total of  77,000  from holding 4iG Nyrt or generate 83.33% return on investment over 90 days.

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

Delta Technologies Nyrt  vs.  4iG Nyrt

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.

4iG Nyrt

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 4iG Nyrt are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, 4iG Nyrt exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delta Technologies and 4iG Nyrt

The main advantage of trading using opposite Delta Technologies and 4iG Nyrt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Technologies position performs unexpectedly, 4iG Nyrt 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 4iG Nyrt will offset losses from the drop in 4iG Nyrt's long position.

The idea behind Delta Technologies Nyrt and 4iG 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.