Correlation Between Delta Air and Gaztransport
Can any of the company-specific risk be diversified away by investing in both Delta Air and Gaztransport 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 Gaztransport 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 Gaztransport et Technigaz, you can compare the effects of market volatilities on Delta Air and Gaztransport 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 Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Gaztransport.
Diversification Opportunities for Delta Air and Gaztransport
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Delta and Gaztransport is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz 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 Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of Delta Air i.e., Delta Air and Gaztransport go up and down completely randomly.
Pair Corralation between Delta Air and Gaztransport
Assuming the 90 days trading horizon Delta Air Lines is expected to generate 1.19 times more return on investment than Gaztransport. However, Delta Air is 1.19 times more volatile than Gaztransport et Technigaz. It trades about 0.08 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.08 per unit of risk. If you would invest 3,903 in Delta Air Lines on September 1, 2024 and sell it today you would earn a total of 2,472 from holding Delta Air Lines or generate 63.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
Delta Air Lines vs. Gaztransport et Technigaz
Performance |
| Timeline |
| Delta Air Lines |
| Gaztransport et Technigaz |
Delta Air and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Gaztransport
The main advantage of trading using opposite Delta Air and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Gaztransport 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 Gaztransport will offset losses from the drop in Gaztransport's long position.| Delta Air vs. Induction Healthcare Group | Delta Air vs. CVS Health Corp | Delta Air vs. Federal Realty Investment | Delta Air vs. Optima Health plc |
| Gaztransport vs. Uniper SE | Gaztransport vs. Mulberry Group PLC | Gaztransport vs. London Security Plc | Gaztransport vs. Triad Group 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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