Correlation Between Delta Apparel and Gildan Activewear

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

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

Diversification Opportunities for Delta Apparel and Gildan Activewear

0.01

Correlation Coefficient

Delta Apparel  Gildan Activewear

Significant diversification

The 3 months correlation between Delta and Gildan is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Delta Apparel and Gildan Activewear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gildan Activewear and Delta Apparel 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 Apparel are associated (or correlated) with Gildan Activewear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gildan Activewear has no effect on the direction of Delta Apparel i.e., Delta Apparel and Gildan Activewear go up and down completely randomly.

Pair Corralation between Delta Apparel and Gildan Activewear

If you would invest  4,793  in Gildan Activewear on October 25, 2024 and sell it today you would earn a total of  294.00  from holding Gildan Activewear or generate 6.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Delta Apparel  vs.  Gildan Activewear

Delta Apparel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delta Apparel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Delta Apparel is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Gildan Activewear

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gildan Activewear are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady forward indicators, Gildan Activewear may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Delta Apparel and Gildan Activewear

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

The idea behind Delta Apparel and Gildan Activewear 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.