Correlation Between Delta Electronics and Stockland

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

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

Diversification Opportunities for Delta Electronics and Stockland

-0.62

Correlation Coefficient

Delta Electronics  Stockland

Excellent diversification

The 3 months correlation between Delta and Stockland is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics Public and Stockland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stockland and Delta Electronics 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 Electronics Public are associated (or correlated) with Stockland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stockland has no effect on the direction of Delta Electronics i.e., Delta Electronics and Stockland go up and down completely randomly.

Pair Corralation between Delta Electronics and Stockland

Assuming the 90 days trading horizon Delta Electronics Public is expected to under-perform the Stockland. In addition to that, Delta Electronics is 2.5 times more volatile than Stockland. It trades about -0.14 of its total potential returns per unit of risk. Stockland is currently generating about -0.01 per unit of volatility. If you would invest  286.00  in Stockland on October 9, 2024 and sell it today you would lose (1.00) from holding Stockland or give up 0.35% of portfolio value over 90 days.

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

Delta Electronics Public  vs.  Stockland

Delta Electronics Public

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Electronics Public are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Delta Electronics reported solid returns over the last few months and may actually be approaching a breakup point.

Stockland

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stockland has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Delta Electronics and Stockland

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

The idea behind Delta Electronics Public and Stockland 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..