Correlation Between Delta Israel and Value Capital

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

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

Diversification Opportunities for Delta Israel and Value Capital

0.83

Correlation Coefficient

Delta Israel  Value Capital

Very poor diversification

The 3 months correlation between Delta and Value is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Delta Israel Brands and Value Capital One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Capital One and Delta Israel 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 Israel Brands are associated (or correlated) with Value Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Capital One has no effect on the direction of Delta Israel i.e., Delta Israel and Value Capital go up and down completely randomly.

Pair Corralation between Delta Israel and Value Capital

Assuming the 90 days trading horizon Delta Israel is expected to generate 2.69 times less return on investment than Value Capital. In addition to that, Delta Israel is 1.01 times more volatile than Value Capital One. It trades about 0.11 of its total potential returns per unit of risk. Value Capital One is currently generating about 0.29 per unit of volatility. If you would invest  3,530  in Value Capital One on April 25, 2025 and sell it today you would earn a total of  1,710  from holding Value Capital One or generate 48.44% return on investment over 90 days.

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

Delta Israel Brands  vs.  Value Capital One

Delta Israel Brands

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Israel Brands are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Delta Israel sustained solid returns over the last few months and may actually be approaching a breakup point.

Value Capital One

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Value Capital One are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Value Capital sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delta Israel and Value Capital

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

The idea behind Delta Israel Brands and Value Capital One 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.