Correlation Between Delta Electronics and Sinopharm Group

Can any of the company-specific risk be diversified away by investing in both Delta Electronics and Sinopharm Group 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 Sinopharm Group 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 Sinopharm Group Co, you can compare the effects of market volatilities on Delta Electronics and Sinopharm Group 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 Sinopharm Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and Sinopharm Group.

Diversification Opportunities for Delta Electronics and Sinopharm Group

0.56

Correlation Coefficient

Delta Electronics  Sinopharm Group

Very weak diversification

The 3 months correlation between Delta and Sinopharm is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics Public and Sinopharm Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopharm Group 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 Sinopharm Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopharm Group has no effect on the direction of Delta Electronics i.e., Delta Electronics and Sinopharm Group go up and down completely randomly.

Pair Corralation between Delta Electronics and Sinopharm Group

Assuming the 90 days trading horizon Delta Electronics Public is expected to under-perform the Sinopharm Group. In addition to that, Delta Electronics is 3.2 times more volatile than Sinopharm Group Co. It trades about -0.22 of its total potential returns per unit of risk. Sinopharm Group Co is currently generating about -0.11 per unit of volatility. If you would invest  266.00  in Sinopharm Group Co on December 21, 2024 and sell it today you would lose (31.00) from holding Sinopharm Group Co or give up 11.65% of portfolio value over 90 days.

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

Delta Electronics Public  vs.  Sinopharm Group Co

Delta Electronics Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Delta Electronics Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Sinopharm Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sinopharm Group Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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 Sinopharm Group

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

The idea behind Delta Electronics Public and Sinopharm Group Co 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.

Check out your portfolio center.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.