Correlation Between DelphX Capital and DIRTT Environmental

Can any of the company-specific risk be diversified away by investing in both DelphX Capital and DIRTT Environmental 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 DelphX Capital and DIRTT Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DelphX Capital Markets and DIRTT Environmental Solutions, you can compare the effects of market volatilities on DelphX Capital and DIRTT Environmental 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 DelphX Capital with a short position of DIRTT Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of DelphX Capital and DIRTT Environmental.

Diversification Opportunities for DelphX Capital and DIRTT Environmental

0.69

Correlation Coefficient

DelphX Capital  DIRTT Environmental

Poor diversification

The 3 months correlation between DelphX and DIRTT is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding DelphX Capital Markets and DIRTT Environmental Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIRTT Environmental and DelphX Capital 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 DelphX Capital Markets are associated (or correlated) with DIRTT Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIRTT Environmental has no effect on the direction of DelphX Capital i.e., DelphX Capital and DIRTT Environmental go up and down completely randomly.

Pair Corralation between DelphX Capital and DIRTT Environmental

Assuming the 90 days trading horizon DelphX Capital Markets is expected to under-perform the DIRTT Environmental. In addition to that, DelphX Capital is 1.74 times more volatile than DIRTT Environmental Solutions. It trades about -0.13 of its total potential returns per unit of risk. DIRTT Environmental Solutions is currently generating about 0.05 per unit of volatility. If you would invest  96.00  in DIRTT Environmental Solutions on December 30, 2024 and sell it today you would earn a total of  8.00  from holding DIRTT Environmental Solutions or generate 8.33% return on investment over 90 days.

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

DelphX Capital Markets  vs.  DIRTT Environmental Solutions

DelphX Capital Markets

Risk-Adjusted Performance

Very Weak

Over the last 90 days DelphX Capital Markets has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

DIRTT Environmental

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DIRTT Environmental Solutions are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, DIRTT Environmental displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DelphX Capital and DIRTT Environmental

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

The idea behind DelphX Capital Markets and DIRTT Environmental Solutions 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 Commodity Directory module to find actively traded commodities issued by global exchanges.