Correlation Between GACM Technologies and Delta Manufacturing

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Can any of the company-specific risk be diversified away by investing in both GACM Technologies and Delta Manufacturing 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 GACM Technologies and Delta Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GACM Technologies Limited and Delta Manufacturing Limited, you can compare the effects of market volatilities on GACM Technologies and Delta Manufacturing 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 GACM Technologies with a short position of Delta Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of GACM Technologies and Delta Manufacturing.

Diversification Opportunities for GACM Technologies and Delta Manufacturing

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between GACM and Delta is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding GACM Technologies Limited and Delta Manufacturing Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Manufacturing and GACM Technologies 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 GACM Technologies Limited are associated (or correlated) with Delta Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Manufacturing has no effect on the direction of GACM Technologies i.e., GACM Technologies and Delta Manufacturing go up and down completely randomly.

Pair Corralation between GACM Technologies and Delta Manufacturing

Assuming the 90 days trading horizon GACM Technologies Limited is expected to generate 1.1 times more return on investment than Delta Manufacturing. However, GACM Technologies is 1.1 times more volatile than Delta Manufacturing Limited. It trades about 0.1 of its potential returns per unit of risk. Delta Manufacturing Limited is currently generating about -0.07 per unit of risk. If you would invest  44.00  in GACM Technologies Limited on August 18, 2025 and sell it today you would earn a total of  7.00  from holding GACM Technologies Limited or generate 15.91% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

GACM Technologies Limited  vs.  Delta Manufacturing Limited

 Performance 
       Timeline  
GACM Technologies 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in GACM Technologies Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, GACM Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.
Delta Manufacturing 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Delta Manufacturing Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

GACM Technologies and Delta Manufacturing Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GACM Technologies and Delta Manufacturing

The main advantage of trading using opposite GACM Technologies and Delta Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GACM Technologies position performs unexpectedly, Delta Manufacturing 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 Manufacturing will offset losses from the drop in Delta Manufacturing's long position.
The idea behind GACM Technologies Limited and Delta Manufacturing Limited 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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