Correlation Between Delta Air and Auction Technology
Can any of the company-specific risk be diversified away by investing in both Delta Air and Auction Technology 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 Auction Technology 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 Auction Technology Group, you can compare the effects of market volatilities on Delta Air and Auction Technology 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 Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Auction Technology.
Diversification Opportunities for Delta Air and Auction Technology
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Delta and Auction is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology 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 Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of Delta Air i.e., Delta Air and Auction Technology go up and down completely randomly.
Pair Corralation between Delta Air and Auction Technology
Assuming the 90 days trading horizon Delta Air Lines is expected to generate 0.71 times more return on investment than Auction Technology. However, Delta Air Lines is 1.41 times less risky than Auction Technology. It trades about 0.11 of its potential returns per unit of risk. Auction Technology Group is currently generating about 0.01 per unit of risk. If you would invest 4,169 in Delta Air Lines on November 1, 2024 and sell it today you would earn a total of 2,645 from holding Delta Air Lines or generate 63.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.13% |
| Values | Daily Returns |
Delta Air Lines vs. Auction Technology Group
Performance |
| Timeline |
| Delta Air Lines |
| Auction Technology |
Delta Air and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Auction Technology
The main advantage of trading using opposite Delta Air and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Auction Technology 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 Auction Technology will offset losses from the drop in Auction Technology's long position.| Delta Air vs. Heavitree Brewery | Delta Air vs. STMicroelectronics NV | Delta Air vs. Aeorema Communications Plc | Delta Air vs. URU Metals |
| Auction Technology vs. Delta Air Lines | Auction Technology vs. JLEN Environmental Assets | Auction Technology vs. Waste Management | Auction Technology vs. Ryanair Holdings 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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