Correlation Between Delta Air and Deltex Medical
Can any of the company-specific risk be diversified away by investing in both Delta Air and Deltex Medical 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 Deltex Medical 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 Deltex Medical Group, you can compare the effects of market volatilities on Delta Air and Deltex Medical 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 Deltex Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Deltex Medical.
Diversification Opportunities for Delta Air and Deltex Medical
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Delta and Deltex is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Deltex Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deltex Medical Group 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 Deltex Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deltex Medical Group has no effect on the direction of Delta Air i.e., Delta Air and Deltex Medical go up and down completely randomly.
Pair Corralation between Delta Air and Deltex Medical
Assuming the 90 days trading horizon Delta Air Lines is expected to generate 0.15 times more return on investment than Deltex Medical. However, Delta Air Lines is 6.47 times less risky than Deltex Medical. It trades about -0.18 of its potential returns per unit of risk. Deltex Medical Group is currently generating about -0.1 per unit of risk. If you would invest 6,772 in Delta Air Lines on November 27, 2024 and sell it today you would lose (591.00) from holding Delta Air Lines or give up 8.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Delta Air Lines vs. Deltex Medical Group
Performance |
| Timeline |
| Delta Air Lines |
| Deltex Medical Group |
Delta Air and Deltex Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Deltex Medical
The main advantage of trading using opposite Delta Air and Deltex Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Deltex Medical 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 Deltex Medical will offset losses from the drop in Deltex Medical's long position.| Delta Air vs. Kinnevik Investment AB | Delta Air vs. Vietnam Enterprise Investments | Delta Air vs. New Residential Investment | Delta Air vs. BlackRock Frontiers Investment |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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