Correlation Between DelphX Capital and Stantec

Can any of the company-specific risk be diversified away by investing in both DelphX Capital and Stantec 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 Stantec 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 Stantec, you can compare the effects of market volatilities on DelphX Capital and Stantec 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 Stantec. Check out your portfolio center. Please also check ongoing floating volatility patterns of DelphX Capital and Stantec.

Diversification Opportunities for DelphX Capital and Stantec

-0.14

Correlation Coefficient

DelphX Capital  Stantec

Good diversification

The 3 months correlation between DelphX and Stantec is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding DelphX Capital Markets and Stantec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stantec 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 Stantec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stantec has no effect on the direction of DelphX Capital i.e., DelphX Capital and Stantec go up and down completely randomly.

Pair Corralation between DelphX Capital and Stantec

Assuming the 90 days trading horizon DelphX Capital Markets is expected to under-perform the Stantec. In addition to that, DelphX Capital is 4.09 times more volatile than Stantec. It trades about -0.02 of its total potential returns per unit of risk. Stantec is currently generating about 0.06 per unit of volatility. If you would invest  12,104  in Stantec on November 29, 2024 and sell it today you would earn a total of  708.00  from holding Stantec or generate 5.85% return on investment over 90 days.

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

DelphX Capital Markets  vs.  Stantec

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 latest unfluctuating performance, the Stock's essential indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Stantec

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stantec are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Stantec may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with DelphX Capital and Stantec

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

The idea behind DelphX Capital Markets and Stantec 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..