Correlation Between Faction Investment and DelphX Capital

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

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

Diversification Opportunities for Faction Investment and DelphX Capital

0.0

Correlation Coefficient

Faction Investment  DelphX Capital

Pay attention - limited upside

The 3 months correlation between Faction and DelphX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Faction Investment Group and DelphX Capital Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DelphX Capital Markets and Faction Investment 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 Faction Investment Group are associated (or correlated) with DelphX Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DelphX Capital Markets has no effect on the direction of Faction Investment i.e., Faction Investment and DelphX Capital go up and down completely randomly.

Pair Corralation between Faction Investment and DelphX Capital

Assuming the 90 days trading horizon Faction Investment Group is expected to under-perform the DelphX Capital. But the stock apears to be less risky and, when comparing its historical volatility, Faction Investment Group is 1.94 times less risky than DelphX Capital. The stock trades about -0.02 of its potential returns per unit of risk. The DelphX Capital Markets is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  11.00  in DelphX Capital Markets on October 7, 2024 and sell it today you would earn a total of  3.00  from holding DelphX Capital Markets or generate 27.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Faction Investment Group  vs.  DelphX Capital Markets

Faction Investment

Risk-Adjusted Performance

0 of 100

Very Weak

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

DelphX Capital Markets

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DelphX Capital Markets are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, DelphX Capital showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Faction Investment and DelphX Capital

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

The idea behind Faction Investment Group and DelphX Capital Markets 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.