Correlation Between Value Capital and Delta Israel

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

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

Diversification Opportunities for Value Capital and Delta Israel

0.83

Correlation Coefficient

Value Capital  Delta Israel

Very poor diversification

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

Pair Corralation between Value Capital and Delta Israel

Assuming the 90 days trading horizon Value Capital One is expected to generate 1.16 times more return on investment than Delta Israel. However, Value Capital is 1.16 times more volatile than Delta Israel Brands. It trades about 0.19 of its potential returns per unit of risk. Delta Israel Brands is currently generating about 0.09 per unit of risk. If you would invest  3,770  in Value Capital One on April 23, 2025 and sell it today you would earn a total of  1,300  from holding Value Capital One or generate 34.48% return on investment over 90 days.

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

Value Capital One  vs.  Delta Israel Brands

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 15 (%) 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.

Delta Israel Brands

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Israel Brands are ranked lower than 6 (%) 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.

Pair Trading with Value Capital and Delta Israel

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

The idea behind Value Capital One and Delta Israel Brands 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.