Correlation Between Delta Apparel and Jerash Holdings

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

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

Diversification Opportunities for Delta Apparel and Jerash Holdings

-0.93

Correlation Coefficient

Delta Apparel  Jerash Holdings

Pay attention - limited upside

The 3 months correlation between Delta and Jerash is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Delta Apparel and Jerash Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jerash Holdings 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 Jerash Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jerash Holdings has no effect on the direction of Delta Apparel i.e., Delta Apparel and Jerash Holdings go up and down completely randomly.

Pair Corralation between Delta Apparel and Jerash Holdings

Considering the 90-day investment horizon Delta Apparel is expected to under-perform the Jerash Holdings. In addition to that, Delta Apparel is 4.29 times more volatile than Jerash Holdings. It trades about -0.12 of its total potential returns per unit of risk. Jerash Holdings is currently generating about 0.0 per unit of volatility. If you would invest  377.00  in Jerash Holdings on October 10, 2024 and sell it today you would lose (37.00) from holding Jerash Holdings or give up 9.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	73.79%
Values	Daily Returns

Delta Apparel  vs.  Jerash Holdings

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.

Jerash Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jerash Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Jerash Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delta Apparel and Jerash Holdings

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

The idea behind Delta Apparel and Jerash Holdings 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.