Correlation Between Delfi and Tootsie Roll

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

By analyzing existing cross correlation between Delfi Limited and Tootsie Roll Industries, you can compare the effects of market volatilities on Delfi and Tootsie Roll 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 Delfi with a short position of Tootsie Roll. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delfi and Tootsie Roll.

Diversification Opportunities for Delfi and Tootsie Roll

0.0

Correlation Coefficient

Delfi  Tootsie Roll

Pay attention - limited upside

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

Pair Corralation between Delfi and Tootsie Roll

If you would invest (100.00) in Tootsie Roll Industries on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Tootsie Roll Industries or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Delfi Limited  vs.  Tootsie Roll Industries

Delfi Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Delfi Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Delfi is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Tootsie Roll Industries

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Delfi and Tootsie Roll

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

The idea behind Delfi Limited and Tootsie Roll Industries 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.