Correlation Between Delta Air and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Delta Air and McEwen Mining 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 McEwen Mining 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 McEwen Mining, you can compare the effects of market volatilities on Delta Air and McEwen Mining 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 McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and McEwen Mining.
Diversification Opportunities for Delta Air and McEwen Mining
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Delta and McEwen is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining 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 McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Delta Air i.e., Delta Air and McEwen Mining go up and down completely randomly.
Pair Corralation between Delta Air and McEwen Mining
Assuming the 90 days trading horizon Delta Air Lines is expected to generate 0.58 times more return on investment than McEwen Mining. However, Delta Air Lines is 1.72 times less risky than McEwen Mining. It trades about -0.09 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.19 per unit of risk. If you would invest 6,307 in Delta Air Lines on October 10, 2024 and sell it today you would lose (166.00) from holding Delta Air Lines or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. McEwen Mining
Performance |
| Timeline |
| Delta Air Lines |
| McEwen Mining |
Delta Air and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and McEwen Mining
The main advantage of trading using opposite Delta Air and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, McEwen Mining 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 McEwen Mining will offset losses from the drop in McEwen Mining's long position.| Delta Air vs. Take Two Interactive Software | Delta Air vs. Ashtead Technology Holdings | Delta Air vs. Allianz Technology Trust | Delta Air vs. Pressure Technologies Plc |
| McEwen Mining vs. Walmart | McEwen Mining vs. BYD Co | McEwen Mining vs. Volkswagen AG | McEwen Mining vs. Volkswagen AG Non Vtg |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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