Correlation Between NAT ABSOLUTE and Delta Electronics

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

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

Diversification Opportunities for NAT ABSOLUTE and Delta Electronics

-0.86

Correlation Coefficient

NAT ABSOLUTE  Delta Electronics

Pay attention - limited upside

The 3 months correlation between NAT and Delta is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding NAT ABSOLUTE TECHNOLOGIES and Delta Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Electronics Public and NAT ABSOLUTE 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 NAT ABSOLUTE TECHNOLOGIES are associated (or correlated) with Delta Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Electronics Public has no effect on the direction of NAT ABSOLUTE i.e., NAT ABSOLUTE and Delta Electronics go up and down completely randomly.

Pair Corralation between NAT ABSOLUTE and Delta Electronics

Assuming the 90 days trading horizon NAT ABSOLUTE TECHNOLOGIES is expected to under-perform the Delta Electronics. In addition to that, NAT ABSOLUTE is 1.07 times more volatile than Delta Electronics Public. It trades about -0.17 of its total potential returns per unit of risk. Delta Electronics Public is currently generating about 0.13 per unit of volatility. If you would invest  9,879  in Delta Electronics Public on December 1, 2024 and sell it today you would earn a total of  1,121  from holding Delta Electronics Public or generate 11.35% return on investment over 90 days.

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

NAT ABSOLUTE TECHNOLOGIES  vs.  Delta Electronics Public

NAT ABSOLUTE TECHNOLOGIES

Risk-Adjusted Performance

Very Weak

Over the last 90 days NAT ABSOLUTE TECHNOLOGIES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Delta Electronics Public

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Electronics Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Delta Electronics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with NAT ABSOLUTE and Delta Electronics

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

The idea behind NAT ABSOLUTE TECHNOLOGIES and Delta Electronics Public 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 Transaction History module to view history of all your transactions and understand their impact on performance.