Correlation Between Continental Beverage and Delphi Technologies

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

By analyzing existing cross correlation between Continental Beverage Brands and Delphi Technologies PLC, you can compare the effects of market volatilities on Continental Beverage and Delphi Technologies 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 Continental Beverage with a short position of Delphi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Beverage and Delphi Technologies.

Diversification Opportunities for Continental Beverage and Delphi Technologies

0.0

Correlation Coefficient

Continental Beverage  Delphi Technologies

Pay attention - limited upside

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

Pair Corralation between Continental Beverage and Delphi Technologies

If you would invest  18.00  in Continental Beverage Brands on January 30, 2024 and sell it today you would earn a total of  7.00  from holding Continental Beverage Brands or generate 38.89% return on investment over 90 days.

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

Continental Beverage Brands  vs.  Delphi Technologies PLC

Continental Beverage

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Continental Beverage Brands are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, Continental Beverage sustained solid returns over the last few months and may actually be approaching a breakup point.

Delphi Technologies PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delphi Technologies PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Delphi Technologies is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Continental Beverage and Delphi Technologies

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

The idea behind Continental Beverage Brands and Delphi Technologies PLC 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.