Correlation Between Delta Air and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Delta Air and Host Hotels 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 Air and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Air Lines and Host Hotels Resorts, you can compare the effects of market volatilities on Delta Air and Host Hotels 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 Air with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Host Hotels.
Diversification Opportunities for Delta Air and Host Hotels
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Delta and Host is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts and Delta Air 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 Air Lines are associated (or correlated) with Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of Delta Air i.e., Delta Air and Host Hotels go up and down completely randomly.
Pair Corralation between Delta Air and Host Hotels
Assuming the 90 days trading horizon Delta Air Lines is expected to generate 1.01 times more return on investment than Host Hotels. However, Delta Air is 1.01 times more volatile than Host Hotels Resorts. It trades about 0.07 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.01 per unit of risk. If you would invest 3,822 in Delta Air Lines on October 12, 2024 and sell it today you would earn a total of 2,903 from holding Delta Air Lines or generate 75.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Delta Air Lines vs. Host Hotels Resorts
Performance |
| Timeline |
| Delta Air Lines |
| Host Hotels Resorts |
Delta Air and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Host Hotels
The main advantage of trading using opposite Delta Air and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Host Hotels 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 Host Hotels will offset losses from the drop in Host Hotels' long position.| Delta Air vs. United Airlines Holdings | Delta Air vs. Silver Bullet Data | Delta Air vs. GlobalData PLC | Delta Air vs. Public Storage |
| Host Hotels vs. Morgan Advanced Materials | Host Hotels vs. JB Hunt Transport | Host Hotels vs. Europa Metals | Host Hotels vs. Capital Metals PLC |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |